ASML’s EUV Choke Point Draws Loeb’s Bet and In-House Confidence Amid Buyback Flurry

Hedge fund Third Point increases exposure to ASML, betting on its EUV monopoly for AI chips, while ASML buys back shares; Q1 revenue beat expectations, India fab deal signed.

The semiconductor equipment giant ASML is being squeezed from two sides of confidence. While hedge fund billionaire Dan Loeb has dramatically increased his exposure through Third Point, the company itself is pouring nearly €80 million into its own shares, signaling that the EUV monopoly remains a cornerstone of the AI infrastructure build-out.

Third Point’s first-quarter repositioning pulled capital from chip designers and into capital-equipment suppliers, betting that the real bottleneck is not who designs the chips but who builds the machines that make them. ASML is the sole producer of extreme ultraviolet lithography systems required for chips below seven nanometers — the engine room for next-generation AI processors. Loeb described the Dutch company as the primary “choke point” in advanced semiconductor manufacturing, with hyperscaler investment expected to reach $650 billion. His move comes as ASML hits the road to present its medium-term plans: Peter Convertito, Director of Investor Relations Americas, appeared at the J.P. Morgan Global Technology, Media and Communications Conference in Boston, with a follow-up at the UBS TMT Conference in London on May 20.

Against that backdrop, ASML is also putting its money where its mouth is. During the trading week of May 11–15, the company bought back 60,388 of its own shares, spending roughly €79.4 million on Monday alone. The repurchase program runs through 2028 and was announced on January 28. The buyback activity reinforced a stock that has climbed 28.02% year-to-date, even after a weekly dip of 2.15%. The shares closed Monday at €1,265.20, about 7% below the recent peak of €1,363.60 but still comfortably above the 200-day moving average — a configuration that suggests the overarching trend remains intact despite short-term profit-taking.

Operationally, the company’s first-quarter revenue of €8.8 billion beat market expectations of roughly €8.5 billion, driven by insatiable demand for EUV lithography tools for AI chips. Earnings per share came in at €7.15, above cautious estimates of €6.00 but missing the Zacks consensus of €7.72. That gap has drawn attention to cost and margin dynamics at a stock that has nearly doubled over the past twelve months. ASML still guides for a 2026 gross margin of 51%–53% on revenue of €36–€40 billion, underpinned by an order backlog of about €38.8 billion that provides visibility well into 2027 and 2028 — regardless of how export-control discussions evolve.

The geographic expansion effort took a concrete step on May 16, when ASML signed a memorandum of understanding with Tata Electronics to support India’s first commercial 300-millimeter chip fab in Dholera, Gujarat. The project carries a planned investment of $11 billion and is slated to begin producing chips for automotive and AI applications from 2027. ASML will supply lithography tools and technical know-how, broadening its presence in a region that is rapidly emerging as a new semiconductor manufacturing hub.

Analyst sentiment remains heavily bullish. Of 38 analysts covering the stock, 32 rate it a buy, with a median price target of $1,661.50 — implying double-digit upside from current levels. Goldman Sachs reiterated its buy rating and a €1,600 target, arguing that the long-term thesis stays intact as long as EUV spending continues to rise and margins do not deteriorate. For the second quarter, ASML expects revenue between €8.4 billion and €9.0 billion, with a gross margin around half of sales. Beyond the near term, the company has laid out a vision for revenue of €44–€60 billion by 2030, a trajectory that relies on the very EUV output Loeb and the buyback are betting on.

This year alone, ASML plans to ship more than 60 EUV systems, a 25% increase year-on-year, as customers like Samsung and SK Hynix accelerate their 2-nanometer and HBM fabrication. Whether the stock’s recent pause is a breather or a warning sign, the confluence of insider confidence, activist conviction, and a multi-year order book suggests the market is not yet ready to take its eyes off Veldhoven.