ASML’s 4% Plunge After Record High Masks a Deeper Story: Geopolitics Meets a Stellar Q1

ASML hit record high then fell 4% on US MATCH Act targeting China chip exports. Dutch protests, but buybacks and strong Q1 results cushion the blow.

Europe’s most valuable tech company briefly touched the clouds on Thursday — ASML shares closed at an all?time high of €1,363.60 — before a political thunderstorm from Washington knocked more than 4% off the stock the very next session. The trigger: a proposed U.S. law known as the MATCH Act that would tighten the screws on chip?making exports to China, including a ban on servicing equipment already installed there.

The Dutch government pushed back immediately, with Trade Minister Sjoerd Sjoerdsma filing a formal protest on May 14. He argued that the extraterritorial reach of the U.S. legislation tramples on national sovereignty and could upend long?standing supply chains. The Netherlands and Washington had previously coordinated on export curbs for EUV lithography, but the MATCH Act’s scope — targeting DUV systems and after?market support — crosses what The Hague considers a red line.

The Cost of a Total Ban

The financial stakes are substantial. China accounted for roughly a third of ASML’s revenue last year, a share the company itself expects to drop to around 20% in 2026. Bank of America analysts have modelled a worst?case scenario in which a full embargo on immersion lithography and service contracts would slice about 15% off total revenue and shave 17% from operating profit. Any negotiated compromise — especially with President Trump and President Xi meeting for a two?day summit in Beijing — could quickly flip the narrative and give the sector a fresh bid.

Buybacks Provide a Floor

Despite the diplomatic noise, ASML has kept its capital?return engine running. The company is in the middle of a multi?billion?euro buyback programme that saw it repurchase shares at average prices between €1,204 and €1,314 in early May. In the first quarter alone it bought back roughly €1.1 billion worth of stock as part of a programme scheduled to run through 2028. That steady demand has helped cushion the latest sell?off and reinforces management’s confidence in the underlying business.

And the underlying numbers are hard to argue with. In the first quarter of 2026, ASML reported net sales of €8.8 billion, a gross margin of 53% (the top end of its own forecast) and net profit of €2.8 billion. For the full year, the company expects revenue in a range of €36?40 billion with gross margins between 51% and 53%, driven by unrelenting demand for EUV and DUV systems used to build AI infrastructure and data centres. The second?quarter revenue target sits at €8.4?9.0 billion.

Investor Calendar and the Political Fog

Chief Financial Officer Roger Dassen will face investors directly in the coming days. He is scheduled to appear at the JP Morgan Global TMC Conference in Boston on May 18?19 and then at the JPM TMT Conference in London on May 21. The diplomatic tensions are certain to feature in the Q&A. For now, the MATCH Act remains a draft bill — a parallel version has been introduced in the U.S. Senate and could be folded into the national defence budget. Until a final vote, the political risk will remain baked into ASML’s share price, even as the company’s operational momentum argues for a higher multiple.