ASML Holding NV (ASML.AS): Price Deviates From Fundamentals

Yesterday saw ASML trade down 7% amid the broader semi sell-off. We think this is overdone, ignoring fundamentals and implying a steep cut to AI buildout programmes across memory and logic foundry. We reiterate our Overweight rating on ASML, Top Pick. What is in the price? Flat Low NA EUV shipments in FY28. ASML has sold off sharply this month (-25% 1M and -17% 1W) as AI sentiment has weakened. Assuming the market applies a 20x 2-year forward P/E, a share price of EUR1,250 implies the market is pricing in FY28 EPSe of EUR62.5, 20% below street estimates of EUR77.93. This implies the market is pricing in 93 EUV Low NA tools in FY28, 16% below VA Cons and flat yy against MSe. We see no signs of slowing buildout in DRAM or in logic and foundry into A16 and A14 at TSMC. We think logic could prove more resilient than DRAM. We reiterate our Overweight rating: fundamentals remain intact, with strong IBM momentum, improving pricing and customer investment plans that appear on track. We think t