ASML Stock Forecast: AI Demand Outruns Capacity Through 2028

In Q3, ASML recorded €11.66 billion in net sales, a 55% increase year-over-year and a 25% increase quarter-over-quarter from €9.33 billion in Q2. In Q3 2026, ASML’s net income rose from €2.92 billion to €4.96 billion and basic earnings per share increased from €7.59 to €12.95.

ASML’s gross margin in Q3 was 57.5%, up from 54.0% in Q2, and better than the previous guidance range of 55%-57%. The Financial Times reported that ASML’s net income for the quarter benefited from a €500 million revaluation of its Mistral AI investment, which, management said, should not be extrapolated.

ASML’s quarterly profitability has improved due to increased demand for upgrades. The company generated €3.29 billion in Q3 of 2026 compared to €2.76 billion in Q2 of 2026 from its installed base management. ASML sold 113 new lithography systems and eight used systems in Q3 of 2026 compared to 86 new lithography systems and five used systems in Q2 of 2026.

What interests me is that upgrades can expand the wafer capacity of a machine without requiring a new purchase. This provides an additional stream of recurring revenue for ASML. While the revenue boost may repeat, the margin boost may not repeat at the same pace.

In July, ASML stated that it expects to raise 2027 Low-NA EUV and DUV immersion capacity by approximately 30% over its 2026 baseline. ASML is also evaluating a 30% increase in capacity in 2028. The most recent company information suggests that even this capacity may not be sufficient for customer demand.

ASML is working on increasing capacity and productivity upgrades for 2028. The visibility on demand is positive, but there may be increased risk if AI spending slows.

ASML expects Q4 revenue to be in the range of €14.2 billion to €15.2 billion, with a gross margin of approximately 57%. If this expectation is realized, it suggests yet another substantial increase in sequential revenue. The annual revenue outlook for 2026 is €44 billion to €45 billion, up from the previous guidance of €43 billion to €45 billion. Full year gross margin is expected to be approximately 56%.

This is the third time that ASML has increased its annual revenue guidance for 2026. ASML must turn these forecasts into shipments without compromising its margin.

ASML expects higher pricing for its systems beginning in 2027 with a fuller impact expected in 2028. The capacity constraints may improve its negotiation position, however the extent of the benefit will depend on customer contracts and timing of production, rather than pricing actions.

The next major technology step is High-NA EUV. Intel and Samsung are driving the adoption of this technology while ASML and Zeiss are researching a possible Hyper-NA successor. Although ASML and Zeiss are researching Hyper-NA, the near term investment case is still supported by Low-NA EUV and DUV as well as upgrades to the existing installed base.

ASML is not allowed to export EUV systems to China where there is still a market for less advanced DUV systems. On October 14, CFO Roger Dassen criticized the U.S. Match Act and warned that tighter DUV controls would accelerate China's development of competing technologies.

New controls could disrupt sales and impact ASML's operations despite existing strong demand. I view this as the key policy risk, beyond capacity execution and the possibility of a broader semiconductor spending slowdown.

ASML repurchased €4.1 billion of shares in Q3 under its 2026-2028 program and announced a €1.88 interim dividend to be paid on November 4. Capital returns and capacity investment must be in balance.

I will be focused on capacity constraints and possible additional 2028 investments, China restrictions and the October 14 investor call. I expect the call to answer the questions of how rapidly ASML can increase its machine output and whether there is activity in the marketplace to validate ASML's pricing plans.

ASML closed October 13 at $1,717.76, down 1.86%. During the session, the stock reached an intraday low of $1,682.02. This was below the support area of $1,686.10 - $1,694.13. Despite this, the stock closed above the support area. This shows a recovery from the intraday low, not a confirmed bearish inside-day pattern. A daily close below the support area would confirm the bearish signal.

ASML Stock Price Chart - Source: Tradingview

The chart shows price below the 50-day average, around $1,743.19, and RSI around 45, below a signal line around 56, which also remain unverified. The chart also shows the 100-day average, around $1,687.79, which is near the support area, although the low for the day briefly dropped below the average. The momentum is weak, but the rebound from that area signals the buyers may not have abandoned the larger demand area.

I will remain bearish while price stays below the $1,743.19 area. A close below $1,686.10 exposes the next supports around $1,617.44 and $1,573.31. A move above $1,721.73, and more importantly $1,743.19, exposes the $1,755.77 to $1,756.75 areas and potentially $1,800.09 to $1,801.08. The $1,870.25 area is another, longer-term, upside target. Earnings-related gaps could take price above these areas.

Key Levels

Latest Close: $1,717.76, down 1.86% on 10/13/2026

Support: $1,694.13 to $1,686.10; then $1,617.44 and $1,573.31

Resistance: $1,721.73 to $1,743.19; $1,755.77 to $1,756.75; $1,800.09 to $1,801.08

RSI: around 45 on chart; not independently verified

Breakout Trigger: close above $1,756.75

Breakdown Trigger: close below $1,686.10

Continued strong demand for AI-related equipment, coupled with system deliveries and upgrades to the installed base, drove the results for Q3 2026. As such, ASML raised its full-year revenue outlook to €44-45 billion.

The supplied chart shows that the key technical support range is between $1,686.10 and $1,694.13.

ASML’s outlook for the first time strengthened after customer forecasts for the period 2027-2028 went beyond the planned supplies for those periods. Pricing and competition, exports and execution of capacity remain the key risks to the stock. I prefer caution for the stock below $1,743.19 until the post-earnings move confirms a change.