ASML’s investor day reinforced our investment thesis for wide-moat ASML and we reaffirm our €850 fair value estimate.

The market reacted positively to the event with shares climbing 7% during the session as ASML’s management addressed investor concerns and reaffirmed the company’s long-term financial targets.

We continue to believe the shares are pricing in a 2030 scenario, which is too pessimistic. The valuation has been hit as investors are overly focused on 2025, which will be weaker than initially expected, albeit still growing by double digits.

Revenue guidance for 2030 was maintained at €44 billion-€60 billion, in line with our 2030 forecast of €54 billion. Management also maintained 2030 gross margin guidance of 56%- 60% while operating expenses and capital expenditure estimates were revised slightly higher. Although 2030 guidance remains unchanged, the reasons differ from the 2022 investor day. ASML is now more bullish about the artificial intelligence market and more cautious in other sectors such as smartphones, consumer electronics, and automotive.

For instance, updated 2025-30 compound annual growth rate estimates are 5% for smartphones, 3% for consumer electronics, and 9% for automotive, revised down from previous projections of 6%, 9%, and 14%, respectively. Meanwhile, the data center forecast has been raised from a 13% CAGR to 18%, and ASML expects the AI server market will grow to $350 billion in 2030.

ASML expects a 10%-20% CAGR in extreme ultraviolet lithography spending for advanced logic applications and a 15%-25% CAGR for DRAM applications from 2025-30. This aligns with our forecast of a 16% CAGR in EUV revenue in that period, driven by increasing EUV exposures needed in advanced logic and memory chips, new fabs, and higher pricing.

Key Morningstar Metrics for ASML

• Fair Value Estimate: €850 • Morningstar Rating: ★★★★ • Economic Moat: Wide • Morningstar Uncertainty Rating: High

ASML Stock Price vs Morningstar Fair Value Estimate

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