ASML’s Euphoric Rally Hits a Wall: A Record High Vanishes Under Geopolitical and Market Pressure

ASML shares crashed 7% from record high amid global tech selloff, SK Hynix production cuts, and US export allegations; analysts remain bullish on deep order backlog.

The reversal was brutal. After notching an all-time high of €1,710 on Monday, ASML’s share price cratered the next day, sliding to an intraday low of €1,575.20 before closing at €1,565.60. The near-7% rout erased weeks of gains in a single session, leaving investors to sort through a tangle of trade tensions, a tech selloff in Asia, and lingering suspicion out of Washington.

That selloff was hardly an isolated event. Across the globe, investors dumped semiconductor and artificial-intelligence stocks, rattled by lofty valuations and uncertainty over interest-rate policy. The pain was particularly acute in South Korea, where the KOSPI index was forced into a temporary trading halt after plunging 10%. ASML’s major customers SK Hynix and Samsung saw their shares tumble more than 12% each, and market chatter quickly turned to production cuts. Reports indicate SK Hynix is throttling back output of advanced AI memory chips, stoking fears that orders for ASML’s lithography tools could be deferred.

The Dutch equipment maker, which holds a monopoly on extreme ultraviolet (EUV) systems capable of printing chips below 5 nanometers, is acutely sensitive to any pullback in capital spending by the memory giants. The volatility in its own stock — now swinging with a 56% range — underscores how deeply the company is tethered to the AI-investment cycle.

Compounding the market turbulence is a fresh geopolitical headache. US Commerce Secretary Howard Lutnick has suggested that components for ASML’s most advanced EUV machines may have found their way to China — a charge the company flatly denies. Management points to the sheer impracticality of smuggling a 180-tonne system that requires dozens of specialised containers and multiple cargo planes to transport. ASML insists it tracks every one of the 314 EUV machines it has ever built, and not a single unit sits inside the People’s Republic.

Yet the political risk does not end with smuggling allegations. The proposed US “MATCH Act” looms on the horizon, a piece of legislation that would empower Washington to unilaterally restrict exports and maintenance services — even for equipment based in allied nations like the Netherlands. Dutch Trade Minister Sjoerdsma has already travelled to Washington to press for a coordinated international approach rather than unilateral pressure.

China remains a vital source of revenue for ASML, accounting for roughly one-fifth of expected sales in 2026, albeit almost entirely for older DUV lithography tools. In 2025, the country contributed about one-third of total revenue. Any curtailment of that business, whether through the MATCH Act or other measures, would carve a visible hole in the company’s top line.

Longer-term optimism, however, remains undented among sell-side analysts. Despite the sharp pullback, Bank of America recently lifted its price target on ASML to $2,345 while maintaining a buy rating. The bullish thesis rests on an order backlog so deep that analysts believe the company may have sold out its entire 2027 capacity as early as this July. That conviction is rooted in insatiable demand for EUV lithography, the only commercially viable pathway for producing the most advanced AI processors.

ASML will publish its second-quarter results in July, and investors will be looking for clarity on order flow, delivery timelines for the next-generation High-NA systems, and how management plans to navigate the diplomatic crossfire between Washington and Beijing. For now, the chip-equipment giant finds itself caught between a record high and a hard place.