ASML Forges $11 Billion India Partnership While Navigating Sector Sell-Off and Nvidia Earnings

ASML shares fell nearly 5% from record high amid sector rout, but partnership with Tata in India and strong AI-driven revenue growth underpin bullish analyst targets.

The Dutch lithography giant ended last week in the red, but the story runs far deeper than a single session’s decline. ASML shares closed at €1,295.20 on Friday, nearly 5% below the record high set on May 14, joining a broad semiconductor rout that pulled the Philadelphia Semiconductor Index down more than 4%. Rising bond yields and renewed geopolitical jitters triggered profit-taking across the sector, hitting names from Samsung Electronics to SK Hynix. Yet the setback barely dents a relentless rally that has more than doubled ASML’s market value since August 2025 and left the stock up roughly 31% year to date.

Beneath the surface of the technical pullback, ASML is cementing its strategic footprint in a new geography. On May 16, Dutch and Indian government officials gathered in The Hague as ASML and Tata Electronics formalized an expansive partnership. Tata will build India’s first commercial 300-millimeter semiconductor fab in Dholera, a project carrying an $11 billion price tag. ASML will supply the critical lithography systems needed to ramp production and will train local engineers, effectively anchoring a domestic supply chain for the subcontinent. The move aligns with India’s aggressive subsidy push to position itself as an alternative manufacturing hub and reduce global reliance on East Asia.

The partnership comes at a time when ASML’s fundamental momentum remains robust. The company posted first-quarter revenue of €8.8 billion and net profit of €2.8 billion, driven by surging investment in AI infrastructure from the world’s largest tech firms. Management has guided for up to €40 billion in full-year 2026 revenue and plans to deliver 60 high-performance EUV machines — a 25% increase over the prior year. Goldman Sachs recently lifted its price target to €1,600, reiterating a buy recommendation, while J.P. Morgan and Bernstein maintain similarly bullish stances.

All eyes now turn to Nvidia, which reports quarterly results on Wednesday, May 20. As the dominant purchaser of AI hardware, Nvidia’s numbers and forward guidance serve as a direct barometer for demand at ASML’s fabrication customers. A disappointing outlook could intensify pressure on chip-equipment names still digesting last week’s sell-off. The broader data calendar adds to the suspense: Chinese economic data arrives Sunday, the Federal Open Market Committee releases its minutes Wednesday, and South Korean export figures — a bellwether for global chip demand — land Thursday.

Geopolitical crosscurrents complicate the outlook even as the India deal opens a new front. The Dutch cabinet has formally objected to the U.S. MATCH Act, proposed legislation that would restrict maintenance of advanced chipmaking systems abroad. ASML has repeatedly stressed that long-term service guarantees for its installed base are vital to its business model; any disruption would be material. Meanwhile, unconfirmed speculation about a potential Apple-Intel manufacturing agreement has stoked chatter about yet another wave of large orders for ASML systems. Concrete details remain elusive, but the mere possibility underscores how tightly the company’s fortunes are tied to every strategic pivot in the semiconductor ecosystem. Wednesday’s Nvidia release will test whether the underlying demand momentum can justify the market’s elevated expectations.