ASML Chief Warns of Regulatory Overkill as Analysts Lift Targets to €1,900

ASML’s CEO cautions against EU overregulation while analysts raise price targets on capacity growth; stock near record highs with buyback and expansion plans.

The Dutch lithography champion has become a lightning rod for two powerful but divergent forces: Wall Street’s unbridled optimism about its capacity to churn out next-generation chipmaking tools, and a Brussels policy push that its chief executive fears could smother the very innovation that made ASML indispensable.

Christophe Fouquet used a LinkedIn post to endorse the broad direction of the European Commission’s June 3 technology sovereignty package — which includes a Chips Act 2.0, a Cloud and AI Development Act, and an open-source strategy aimed at slashing the EU’s reliance on foreign digital products (currently above 80%). But he drew a firm line. The CEO warned that the Commission’s plan to steer or oversee state aid for strategic projects risked creating “overcomplication and bureaucracy.” Such initiatives, he argued, must be “fundamentally responsive to the needs of the industry” and left largely to the private sector. His intervention carries weight: ASML’s extreme ultraviolet lithography (EUV) machines are the sole means of producing the most advanced AI chips, a quasi-monopoly the Commission’s strategy paper failed to highlight.

The central policy debate unfolds as analysts drive a parallel narrative of capacity-driven growth. JPMorgan and Morgan Stanley have both sharply raised their price targets — to €1,900 and €1,660 respectively — on the belief that ASML can deliver far more lithography systems than the market currently prices in. JPMorgan’s Sandeep Deshpande now expects more than 110 so-called Low-NA systems to be shipped without additional factory space, versus the roughly 90 units investors had been assuming. Morgan Stanley forecasts over 100 tools delivered by 2028. The upgrades come as the stock trades at €1,429.40, having surged nearly 45% since the start of the year and remaining within striking distance of the June 4 record of €1,529.80.

To secure that long-term expansion, ASML is racing to build physical capacity. Eindhoven’s city council has approved a massive extension on the Brainport Industries Campus, with construction due to start in the third quarter of 2026. The company expects the site to add around 20,000 direct jobs. Meanwhile, short-term headwinds have emerged: weak guidance from US chipmaker Broadcom and robust US jobs data pressured the stock recently, though support near the 50-day moving average at roughly €1,279 keeps the underlying uptrend intact.

ASML’s financial firepower underpins both its growth and its shareholder returns. The group posted net sales of €8.8 billion in the first quarter of 2026 with a robust gross margin, and management targets full-year revenue of between €36 billion and €40 billion at a gross margin of 51% to 53%. A €12 billion share buyback program running through 2028 is steadily lifting earnings per share; in the first three months alone, ASML repurchased around €1.1 billion of its own stock and subsequently cancelled the shares. The dividend for 2025 is set at €7.50 per share, a 17% increase from the prior year.

The company’s competitive moat remains formidable, even as challengers emerge. California-based start-up Substrate recently raised $100 million for an alternative X-ray lithography approach, while Canon and Nikon are pushing cheaper systems. Fouquet dismissed the threat, noting that building such technology from scratch is an enormous hurdle. A single High-NA system already costs up to $380 million, leaving ASML’s EUV platform effectively irreplaceable for high-performance chip mass production.

ASML’s market capitalization has swelled to $668 billion, overtaking Novo Nordisk as the most valuable company ever listed in Europe (roughly €500 billion in European terms). With the stock still 6.6% below its 52-week high but more than 140% above the trough of €593.60, the company’s performance gives Fouquet’s voice in Brussels a weight that is hard to ignore. The tension between regulatory ambition and industrial reality will likely define the next chapter for Europe’s most indispensable technology champion.