ASML's Dual Narrative: Buybacks and Bullish Calls Collide With a 2024 Class Action

ASML repurchases €390.7M in shares, stock up 73% YTD on strong demand and raised 2026 outlook, despite ongoing securities class action.

The Dutch lithography giant is living two lives at once. On one side, ASML is executing its share repurchase program with machine-like precision, collecting more than 266,000 of its own shares from the market in a single week. On the other, a securities class action filed in late 2024 is winding its way through a New York federal court, threatening to cast a legal shadow over an otherwise buoyant stretch for the stock.

Between August 3 and August 7, the company snapped up between roughly 51,900 and 55,300 shares per trading day, paying anywhere from €1,412.90 to €1,506.07 per share. The weighted average price for the 266,460 shares acquired came to approximately €1,467.02, putting the total outlay at around €390.7 million. The repurchases, executed under the company's standing buyback program, have continued into recent days.

A Stock in Robust Shape

The buyback activity lands at a moment when the shares are showing considerable strength. Friday's close came in at €1,590.00, down 1.0 percent on the day, though the weekly picture tells a different story: a 5.4 percent gain. The stock now trades roughly 29 percent above its 200-day moving average of €1,235.26, and sits 9.0 percent below its 52-week high of €1,748.00.

The rally has been building for months. Since the end of March, the share price has climbed 22 percent, and on a year-to-date basis, the equity has appreciated by 73 percent. The momentum traces back to a second upward revision of the company's 2026 revenue outlook, which now stands at €43 billion to €45 billion, up from the €36 billion to €40 billion range previously communicated.

Wall Street Stays Constructive

The analyst community has responded in kind. Bank of America Securities reaffirmed its buy recommendation on Thursday with a price target of €2,452, while Bernstein Research, under analyst David Dai, held firm on its outperform rating with a €2,500 target. Both imply substantial upside from current levels.

Goldman Sachs went a step further, adding ASML to its European Conviction List for August, citing improved visibility on capacity expansion backed by strong order intake across both logic and DRAM segments. RBC Capital had raised its price target from $1,700 to $2,000 in mid-July, maintaining an outperform rating on the back of persistent EUV capacity scarcity and robust AI-driven demand. Bank of America, on the same day, reiterated its buy call with a $2,831 target, arguing that emerging competitors in lithography actually validate ASML's special position rather than undermine its technological lead.

The earnings picture supports the enthusiasm. Early August brought a 17 percent year-over-year increase in the interim dividend, alongside the reaffirmed 2026 guidance. The First Group Bank raised its 2026 earnings-per-share estimate to $45.23 on August 5, up from $44.50, and projects $62.33 for 2027. Shareholders have also been rewarded on the distribution front: a final dividend of €2.70 per share for fiscal 2025 was approved at the annual general meeting, bringing total payouts for the year to €7.50 per share, while a quarterly interim dividend of $2.1507 per share was paid out in early August to shareholders registered on July 28.

The Legal Overhang

The class action, filed on November 14, 2024, by Bernstein Litowitz Berger & Grossmann in the U.S. District Court for the Southern District of New York, targets ASML and certain executives. The complaint alleges that between January 24 and October 15, 2024, the company misled investors about growth prospects and demand for its EUV and DUV machines.

The allegations pertain exclusively to communications from 2024, placing them in stark contrast to the current operational trajectory. The legal proceedings, while a potential source of reputational friction, are unlikely to derail the fundamental momentum — though they do inject an element of uncertainty into what has otherwise been a remarkably clean narrative.

Chipmakers Queue Up

The demand signals from the semiconductor industry remain emphatic. TSMC reported July revenue of NT$467.58 billion, a 44.7 percent increase year over year — a data point analysts read as a positive indicator for advanced lithography demand. SK Hynix is scaling its annual chip investments to a record 45 trillion won, roughly $31 billion, to expand AI memory production, including additional EUV machines from ASML.

New customers are emerging as well. Nanya Technology is reportedly set to become an EUV customer to expand its advanced memory manufacturing capacity, while Samsung has announced plans to deploy ASML's High-NA EUV systems for its 1-nanometer process node, with mass production slated for 2030.

Competitive Context

Investor attention is also drifting toward potential challengers in the lithography space. Source Foundry, a startup, has secured $400 million in fresh capital from hedge fund Situational Awareness, which has now invested a total of $500 million in the company. The startup carries a valuation of $5 billion. For ASML, this remains competitive context without immediate business impact, though it signals that capital is increasingly flowing toward alternative lithography technologies.

The next significant date on the calendar is October 14, when ASML reports third-quarter 2026 results. By then, investors will have a clearer read on whether the class action amounts to little more than legal noise — or whether it carries consequences beyond routine litigation costs. For now, the combination of ongoing buybacks, raised dividends, and confirmed guidance has analysts leaning firmly toward the former.