ASML’s 42% Rally Raises Split Hopes Even as Supply Constraints and Geopolitical Risks Loom

ASML stock surges 42% YTD to new high amid AI, satellite, and robotics chip demand. CEO discusses supply bottlenecks; split rumors persist as shares trade above $1,550.

The lithography giant’s stock closed at €1,403.40 on Friday, marking a fresh 52-week high and a year-to-date gain of 42 percent. The surge reflects an insatiable appetite for chips powering artificial intelligence, satellite communications and robotics — sectors that are now straining ASML’s production capacity to its limits. Chief executive Christophe Fouquet has been working to boost output, acknowledging that supply bottlenecks are likely to persist across the industry.

One high-profile conversation underscored the scale of demand. Fouquet recently spoke directly with Elon Musk about the planned TeraFab semiconductor project and the expansion of Starlink, both of which would require enormous volumes of advanced lithography equipment. No specific order has emerged from those talks, but the discussions highlight the pressure mounting on ASML as customers race to secure capacity.

The stock’s meteoric rise has revived a perennial question for investors: when will ASML split its shares? The debate gained momentum after US rival KLA announced a 10-for-1 split in May, accompanied by a strong quarterly report and a 21% dividend hike. KLA’s stock was trading around $1,800 at the time; ASML’s ADR now sits above $1,550, making it one of the most expensive equities on a per-share basis. Along with Eli Lilly and TransDigm, ASML is frequently cited as a split candidate — yet the company has made no official move.

A split would be cosmetic, changing neither market cap nor earnings, but would make the stock more accessible to retail investors and reduce option pricing. However, ASML is not a US corporation. Listed in Amsterdam and paying a euro dividend, the company operates a multi-billion-euro buyback programme. Coordinating an ADR split unilaterally is structurally more complex than for American peers. The last time ASML altered its share structure was a reverse split in November 2012; prior to that, conventional splits occurred in 1997, 1998 and 2000.

Financial performance provides a solid foundation for the rally. In the first quarter, ASML generated revenue of €8.8 billion and earnings per share of €7.15. Management has set a full-year revenue target of up to €40 billion. The order backlog is projected to reach €38.8 billion by the end of 2025, offering strong visibility. For the current financial year, the company plans a dividend of €7.50 per share — a 17% increase from a year earlier — and repurchased roughly €1.1 billion in shares during the first quarter alone.

Geopolitical uncertainties remain a persistent headwind. The company has already factored in the likelihood that export controls to China will be tightened further, a risk that continues to shadow the stock. With no fresh corporate results due until July, market participants are turning their attention to macro data. In the US, the PCE price index — the Federal Reserve’s preferred inflation gauge — will be closely watched. Any upside surprise could dampen expectations for interest rate cuts, potentially weighing on richly valued technology shares.

The technical picture remains overwhelmingly bullish. The stock trades nearly 37% above its 200-day moving average, yet the relative strength index sits at roughly 32, suggesting the rally is not overbought. Of 39 analysts covering the stock, 38 rate it a buy. The average price target is €1,483, with a high of €1,900 and a low of €980. Should US inflation data come in moderate, ASML has clear air for further gains. Until July’s earnings release, the talk of a stock split will dominate the conversation among individual investors.