ASML Holding (ASML +4.97%) is one of the most important semiconductor companies in the world, as its machines allow chipmakers and foundries to manufacture chips that power multiple applications ranging from data centers to smartphones to computers to cars, among other things.
However, the stock's performance has been quite disappointing in the past year. ASML stock has lost 18% of its value during this period. The company's latest results for the second quarter of 2025 added to investors' misery. ASML stock fell more than 8% following release of the company's Q2 report on July 16.
Let's see why that was the case and find out if this semiconductor stock's poor performance in the past year is an opportunity for savvy investors to buy a potential long-term winner.
Image Source: Getty Images
ASML's cloudy 2026 guidance is weighing on the stock
ASML's latest quarterly numbers ticked all the right boxes. The company reported a 24% increase in revenue from the year-ago period, while its earnings shot up by 47%. Its numbers were well ahead of consensus expectations. The Dutch company received new orders worth 5.5 billion euros during the quarter, well ahead of the Wall Street estimate of 4.8 billion euros.
However, ASML's Q3 guidance of 7.4 billion euros to 7.9 billion euros in revenue was lower than analysts' expectations of 8.2 billion euros. Investors were also alarmed by the company's 2026 outlook. Though it is expecting a 15% increase in revenue this year, CEO Christophe Fouquet remarked that while the company is preparing "for growth in 2026, we cannot confirm it at this stage."
NASDAQ: ASML
Key Data Points
ASML's 2026 outlook is clouded by the "increasing uncertainty driven by macro-economic and geopolitical developments" even though it is witnessing strong demand from artificial intelligence (AI) customers. So, while ASML's bookings increased by 40% on a quarter-over-quarter basis, the company's conservative guidance indicates that it is wary of the ongoing tariff-related turmoil and export controls that have the potential to hamper semiconductor sales.
As such, there is a good chance that ASML stock could continue to remain under pressure in the near term on account of the negative sentiment created by its cautious outlook. However, if the stock continues to dip further, it may be a good idea to buy it from a long-term perspective.
The company is confident of achieving its long-term targets
Though ASML has warned about the potential impact of tariffs and other geopolitical developments on its growth next year, the company believes that the semiconductor market will keep growing in the long run, thanks to catalysts such as AI. That's the reason why ASML has reiterated its 2030 revenue forecast of 44 billion euros to 60 billion euros, the midpoint of which points toward a 60% increase in its top line from this year's projected revenue of 32.5 billion euros.
ASML also expects its gross margin to land between 56% and 60% by the end of the decade. Again, that would be a nice bump over its 2025 gross margin forecast of 52% at the midpoint. The long-term guidance seems achievable considering the global investments being made in AI infrastructure, which is encouraging semiconductor manufacturers to increase their capital expenses on equipment.
McKinsey is forecasting that a whopping $6.7 trillion will be spent on data centers across the globe by 2030 to support both AI and non-AI workloads. The firm adds that 60% of the spending will go toward manufacturing chips and other computing hardware. Not surprisingly, McKinsey is expecting a $1 trillion investment in new semiconductor plants through the end of the decade.
ASML's 90% share of the global lithography equipment market puts it in a solid position to capitalize on this massive spending on semiconductor plants over the next five years. As a result, there is a good chance that ASML will be able to regain its mojo in the long run and deliver solid gains to investors. That's why buying ASML stock while it is under pressure could turn out to be a smart move.
It is trading at 26 times earnings right now, which is a discount to the average earnings multiple of 51 for the U.S. technology sector. The company's growth has been solid of late, as its latest quarterly results tell us, and the prospects of the semiconductor equipment market could help it sustain that momentum in the long run as well.
Considering the potential margin gains that ASML is anticipating over the next five years, the company seems set to deliver robust bottom-line growth. In all, savvy investors can consider accumulating this semiconductor stock while it is under pressure as it could eventually turn out to be a winner going forward.
