ASML Faces a Dual Signal: Institutional Caution Meets Analyst Conviction Ahead of July 15 Earnings

ASML shares extend three-week pullback as Asian chip stocks plunge, but analysts remain bullish with raised price targets amid strong AI-driven demand.

ASML's stock slipped 1.66% on Monday to €1,548.00, extending a three-week pullback that has seen the shares lose 4.14% over the past month. The decline, triggered by a rout in Asian chip stocks, now puts the Dutch lithography champion just 11.44% below its 52-week high of €1,748.00, reached on June 30. Yet the long-term picture remains formidable: the stock has surged 56.63% year-to-date and 124.09% over the past twelve months, gains that many market participants view as a natural breather rather than a reversal.

The sell-off originated in Japan, where memory-chip maker Kioxia suffered a sharp drop on July 13 after falling 9.3% the previous day. Adding to the anxiety, Bernstein issued a "Sell" rating on Kioxia, and the broader Nikkei index lost roughly 272 points as Advantest also weighed. The contagion spread to South Korea, where the Kospi triggered a sell-side circuit breaker after plunging as much as 8%. With the index now roughly 25% below its June high, it is technically in bear-market territory. Geopolitical tensions compounded the unease: reports that Iran had blocked the Strait of Hormuz pushed oil prices higher and further eroded risk appetite for semiconductor equities.

Against this backdrop, ASML's stock has slipped 3.03% in the past week, but technical indicators suggest the medium-term trend remains intact. The shares still trade 32.30% above their 200-day moving average and 4.24% above the 50-day average. The relative strength index stands at 51.1, a neutral reading that leaves room for movement in either direction when ASML reports its second-quarter results on Wednesday, July 15, before the European open.

While retail and institutional investors have been trimming positions, analyst sentiment is turning more bullish. Deutsche Bank raised its price target on ASML from €1,600 to €1,800 on July 10, maintaining a Buy rating. Morgan Stanley followed on July 7 with a target of €1,830, also with a Buy recommendation. The optimism is underpinned by strong demand signals from the chip-equipment supply chain. Applied Materials posted a record quarterly revenue of $7.91 billion in its second fiscal quarter, an 11% year-over-year increase, and now expects more than 30% growth in its semiconductor equipment business for calendar 2026 — well above its prior forecast of over 20%. The company credited AI-driven demand for logic chips, DRAM, and advanced packaging.

Institutional selling, however, has made headlines. Midwest Trust Co. reduced its ASML position by 11.6% on July 12, selling 2,751 shares and leaving itself with 20,948 shares worth roughly $27.67 million at the reporting date. General American Investors Co. cut its stake by 11.3%, selling 7,000 shares to hold 55,000 shares — still representing about 4.8% of the firm's portfolio and making ASML its fifth-largest holding. These moves likely reflect profit-taking after the stock's extraordinary run, or portfolio rebalancing ahead of what could be a volatile summer, rather than a fundamental loss of faith.

ASML itself has been buying back stock throughout the turbulence. Between June 29 and July 3, the company repurchased up to 10,000 shares daily at weighted average prices ranging from €1,587.15 to €1,696.17. The buyback program provides a floor under the stock and signals management’s confidence in the company’s valuation.

All eyes now turn to Wednesday’s earnings release. ASML guided for second-quarter net sales of €8.4 billion to €9.0 billion, with gross margin between 51% and 52%. The company raised its full-year 2026 revenue forecast in April from €34-39 billion to €36-40 billion, citing demand for advanced chips that continues to outstrip supply. Since the first quarter of 2026, ASML has stopped reporting quarterly order intake, arguing that large orders arrive irregularly and can distort the true demand picture. In Q1 it described order intake only as "very strong."

Without the usual order-book figures, investors will focus on shipment volumes, management commentary on China demand, and the impact of U.S. export restrictions. A day later, on July 16, TSMC — one of ASML’s biggest customers for advanced lithography tools — will report its own results. TSMC’s capital expenditure plans will provide a vital check on whether ASML’s assumptions for the second half of the year are realistic.

The quarterly report thus becomes a critical test of whether the recent Asian turmoil is merely a temporary sentiment shock or the start of a deeper reassessment of semiconductor equipment valuations in the AI era. With the stock still up more than 120% over the past year and analysts raising targets, the burden of proof falls on ASML to show that the underlying demand narrative remains intact.