ASML Shares Decline Amid Mixed Signals from Leadership and Analysts

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Shares of Dutch semiconductor equipment manufacturer ASML fell approximately 3% in Friday's trading session. This drop occurred despite a bullish long-term outlook presented by CEO Christophe Fouquet in an interview with Bloomberg and concurrent positive analyst ratings from two major financial institutions.

The decline appears linked to renewed geopolitical concerns surrounding ASML's business in China. An investigation by Dutch broadcaster Nieuwsuur suggested the company sold components to a subsidiary of the state-owned China Electronics Technology Group, a key supplier to the Chinese military. This report introduced fresh uncertainty for investors.

CEO Fouquet had previously indicated, during the third-quarter 2025 earnings presentation, that demand from China is expected to decline significantly in 2026. The market is now awaiting detailed figures for 2026, which ASML plans to present in January, to gauge the full impact of export restrictions on its Chinese operations.

CEO Outlines a Decade-Long Roadmap for AI Chips

In his Bloomberg interview, Fouquet emphasized ASML's critical role in manufacturing the advanced chips required for artificial intelligence. He stated that the company's Extreme Ultraviolet (EUV) lithography technology provides clear visibility into customer requirements for the next 10 to 15 years. The strategic focus, according to Fouquet, rests on three pillars: resolution, precision, and productivity.

The CEO also acknowledged a technological shift, noting that lithography alone will soon be insufficient to manage increasing transistor density. Consequently, ASML is ramping up investment in advanced 3D packaging solutions, which allow for the vertical stacking of chips. The company delivered its first advanced packaging scanner in Q3 2025, boasting productivity up to four times greater than previous-generation systems.

Financial Performance and Analyst Conviction

For the third quarter of 2025, ASML reported revenue of €7.5 billion with a gross margin of 51.6%. The company is targeting roughly 15% revenue growth for the full year.

This performance underpins continued analyst optimism. On December 10, Bank of America added ASML to its list of 25 top stock picks for 2026, citing the potential for a market re-rating ahead of a projected inflection point in 2027. Separately, Citi reaffirmed its "Buy" rating on ASML shares, maintaining a price target of €1,200. The firm's analysts pointed to sustained, AI-driven demand as a key catalyst for the stock.