ASML Stock Keeps Sinking. Why It’s Not a Bargain Yet.

ASML’s most advanced lithography machines can cost around $400 million each. (Emmanuel Dunand/AFP via Getty Images)

ASML stock was falling again early Thursday after its downbeat message on growth next year shocked the market. The Dutch chipmaking equipment provider isn’t cheap enough to consider picking up just yet, according to Wall Street analysts.

American depositary receipts of ASML were down 0.7% at $749.18 in early trading. That was set to add to an 8.3% fall the previous day after the company warned it couldn’t guarantee growth in 2026.

ASML has a virtual monopoly on the lithography machines that are crucial for manufacturing advanced semiconductors. Its key clients include Taiwan Semiconductor Manufacturing , which reported booming sales on Thursday as it benefits from demand for artificial-intelligence chips.

However, good times for TSMC won’t necessarily translate into sales for ASML, at least in the short term. The Taiwanese company has been reluctant to commit to buying ASML’s latest generation of extreme ultraviolet (EUV) lithography machines, which can cost around $400 million each, while other potential customers Intel and Samsung Electronics are dealing with problems in their own chip businesses.

“The question which is difficult to answer is whether [ASML’s warning] is due to a delay in decision making at AI-exposed customers who give late indications due to tariff-related uncertainty or whether ASML knows about the investment plans of Intel or Samsung,” wrote J.P. Morgan analyst Sandeep Deshpande.

He kept an Overweight rating on ASML’s ADRs but lowered his target price to $957 from $1,104. Deshpande warned the stock was unlikely to gain significantly until ASML can give further guidance on its 2027 prospects

A key question hanging over ASML is the prospect of tariffs. President Donald Trump has threatened 30% levies on the European Union from Aug. 1, which could make it more expensive for ASML to ship its chip tools to Intel and other American customers.

“When we have conversations with our customers, we do sense that they’re uncertain as to what the tariff discussion, where it might land and what the implications are for GDP growth and as a result of that, what that means for the demand of their customers,” ASML CFO Roger Dassen said on an earnings call on Wednesday.

UBS analyst Francois-Xavier Bouvignies reiterated a Neutral rating on ASML stock in a research note. He raised his price target on the Amsterdam-listed stock to €660 from €610 previously. ASML shares were up 2.5% at €641.40 in Amsterdam on Thursday, after falling 11% the previous day.

“Despite ASML lowering expectations on FY‘26, we believe this is not yet sufficient to act as a clearing event,” Bouvignies wrote.

Write to Adam Clark at adam.clark@barrons.com