ASML’s Rally Faces a Reality Check: Analyst Targets Soar Above €1,900 While Broadcom’s Slump Tempers Enthusiasm

BofA and Barclays lift ASML targets above €1,900, but Broadcom's 13% post-earnings drop warns even strong results may not meet elevated market expectations. ASML stock nears all-time high with overbought signals.

The euphoria surrounding ASML shows no signs of fading, with two major banks lifting their price targets above the €1,900 mark. Yet a dramatic post-earnings selloff in one of its key customers, Broadcom, has injected a note of caution into the narrative, reminding investors that even stellar performance may no longer satisfy the market’s insatiable expectations.

Bank of America Securities raised its target on the Dutch lithography giant from €1,710 to €1,921, maintaining a Buy rating. Barclays followed suit, boosting its target from €1,575 to €1,900 with an Overweight recommendation. Both firms point to growing visibility in EUV capacity planning and demand that is expected to stretch at least through 2028. ASML remains the sole supplier of EUV lithography systems, a monopoly that makes it indispensable for manufacturing the most advanced chips. BofA expects EUV capacity to rise to more than 90 units per year by the end of 2027, driven primarily by the buildout of AI infrastructure.

That AI buildout was on full display in Broadcom’s latest results. The US chipmaker posted a 48% revenue increase in its second quarter, with AI semiconductor revenue surging 143% year-on-year to $10.8 billion. Management guided for another record quarter ahead. Yet the stock tumbled more than 13% in after-hours trading as investors had hoped for an even more aggressive upward revision to long-term forecasts. For ASML, which supplies the critical equipment needed to produce Broadcom’s networking chips and accelerators, the selloff serves as a stark reminder: the bar for perfection has been raised dramatically.

ASML’s own financials have been nothing short of robust. In the first quarter of 2026, revenue reached €8.8 billion with a gross margin of 53% and net profit of €2.8 billion. The company raised its full-year guidance to a range of €36 billion to €40 billion, citing unrelenting demand from chipmakers racing to expand capacity for AI data centers. The backlog is such that supply currently falls short of orders, though the risk of tighter export controls remains a potential headwind.

The stock has responded in kind. Trading at €1,491.40, ASML sits less than half a percent from its all-time high set on June 4. Year-to-date, the shares have gained roughly 53%, and over the past twelve months the advance exceeds 130%. The technical picture, however, hints at stretched valuations: the relative strength index stands at 70.6 in one reading and just under 69 in another, both indicating a nearly overbought condition. Moreover, the stock trades about 40% above its 200-day moving average, a gap that historically signals vulnerability to pullbacks.

The next catalyst arrives with second-quarter results, expected in July. Investors will be watching closely to see whether ASML can once again raise its full-year forecast, a move that would test the durability of the AI investment cycle. For now, the fundamentals remain powerful, but as Broadcom’s swoon illustrates, even the strongest performers are not immune to the market’s shifting mood.