At 1,574 Euros, ASML's Stock Faces a New Kind of Question: Is It Too Expensive for Its Own Good?

As ASML prepares for Q2 earnings on July 15, its stock has more than doubled in a year, sparking stock split talk. Analysts raise targets on AI-driven EUV demand, but valuation at 58x P/E raises caution.

The Netherlands-based chip-equipment juggernaut ASML heads into its second-quarter earnings release on July 15 with a stock that has more than doubled over the past twelve months — and a growing chorus of voices wondering whether the price tag itself is becoming the story. At Friday's close of €1,574.20, the shares have slipped 3.30% on the week, yet they remain up 59.28% since January and a staggering 129.14% over the trailing twelve months.

That kind of run has pushed ASML's market capitalization to €589.3 billion and, unusually, prompted market commentators to speculate about the possibility of a stock split. The current price level, hovering just below the psychological €1,800 threshold often associated with such corporate actions, has reignited a debate that would have been unthinkable when the stock traded at €593.60 in early August 2025. While the company has made no statement on the matter, the mere fact that the topic is being discussed signals how compressed expectations have become.

Bullish Calls Keep Rolling In

Analyst upgrades continue to pour in even as the shares cool. Deutsche Bank lifted its price target from €1,600 to €1,800, maintaining a buy rating. Bernstein's David Dai went further, raising his target by 33% from $1,971 to $2,623 (approximately €2,400 at current exchange rates) and reaffirming an outperform rating. Dai's conviction stems from higher revenue expectations tied to ASML's extreme ultraviolet (EUV) lithography machines: he now sees 91 units shipped in 2027 and 113 in 2028, driven by capacity expansions for advanced logic chips and DRAM memory in the artificial-intelligence boom. Morgan Stanley also joined the upgrade parade this week, though it did not disclose a specific target.

Raising those numbers is a direct bet that the AI infrastructure cycle will sustain capital spending at chipmakers. Supporting evidence came from Applied Materials CEO Gary Dickerson, who told Nikkei Asia that manufacturers are now planning equipment needs two or more years out. Applied Materials itself forecasts a 50% revenue jump in chip-packaging tools — a positive knock-on effect for ASML, which sells into the same investment wave.

The Valuation Conundrum

Yet for all the analyst enthusiasm, not everyone is convinced the stock can keep climbing. A Seeking Alpha analysis published on July 10 rated ASML a hold despite robust chip demand and upward earnings revisions. The reason is straightforward: valuation. The shares trade at a trailing price-to-earnings ratio of 58 and a forward P/E of 48.6 — both well above the five-year average. Even though earnings-per-share estimates for 2027 have soared from $36.46 to $49.46, largely on AI tailwinds, the multiple leaves little margin for disappointment. Historical patterns offer scant comfort: ASML's post-earnings reactions have frequently been muted even when results beat expectations.

That tension — rising analyst targets colliding with historically stretched valuation — defines the setup for the July 15 report. The stock sits 9.94% below its 52-week high of €1,748 reached on June 30, and comfortably above both its 50-day moving average of €1,477.77 and its 200-day moving average of €1,166.58. The 14-day relative strength index stands at 51.1, a neutral reading that suggests no imminent technical reversal.

Volatility as a Feature, Not a Bug

The calm RSI belies a broader backdrop of elevated swings. ASML's annualized 30-day volatility clocked in at 64.27%, a level typical of periods just before major earnings events. The recent price action illustrates the pattern: a 4.70% monthly gain offset by a 3.30% weekly loss, with sharp drawdowns punctuating the prevailing uptrend.

Amid this choppiness, ASML has continued to repurchase shares, announcing fresh buyback transactions in early July — a routine but steady signal of confidence that sits oddly alongside the split chatter. The buyback program underscores management's long-term view, even as the market debates whether the stock has become a headline in its own right.

The Real Test Is Structural

Ultimately, a stock split would alter nothing about ASML's core business: its quasi-monopoly in EUV lithography, its dependence on the AI capex cycle, or its bulging order book. But the fact that the market is even discussing it reveals how far sentiment has traveled. The shares are no longer just a proxy for chip demand; they have become a debate about how much good news can be priced in before the next catalyst arrives.

On July 15, ASML will provide its answer — whether the numbers can justify the premium, or whether the stock's own price tag has become the biggest risk of all.