ASML Holding NV ADR (ASML.US) Q2 earnings, JP Morgan raised to $2200: Short-term performance is not a true test, the key is in the revaluation in 2027 outlook.

The giant of the lithography machine ASML Holding NV ADR (ASML.US) will announce its second quarter performance for 2026 on July 15th. Due to growing concerns in the market about the sustainability of capital expenditure on artificial intelligence (AI), ASML Holding NV ADR, which is in the upstream of the AI industry chain, has seen a relatively lackluster performance in its stock price - its stock price has dropped by over 11% since July. In a recent research report, JPMorgan Chase provided a forward-looking analysis of ASML Holding NV ADR's second quarter performance, pointing out that the company needs to release signals of capacity expansion in 2027 and strong demand in order for the stock price to make a breakthrough. For the second quarter performance of ASML Holding NV ADR, JPMorgan Chase predicts that the company's second quarter revenue will reach 8.7 billion euros (a year-on-year increase of 13.1% and a quarter-on-quarter decrease of 0.8%), slightly lower than market consensus by 1.4% but in line with the company's previous guidance range of 8.4-9 billion euros. In terms of profitability, JPMorgan Chase expects the company's gross margin for the second quarter to be 51.7%, within the company's guidance range (51%-52%), slightly lower than market consensus of 52%; the expected earnings per share for the second quarter is 6.67 euros, a decrease of 2.3% compared to market consensus. ASML Holding NV ADR previously forecasted that its revenue in 2026 would increase by 16.3% year-on-year to approximately 38 billion euros (calculated at the midpoint of the range). Currently, the market's consensus expectation for ASML Holding NV ADR's revenue growth in 2026 is 19.8%, higher than the company's guidance range midpoint but still within the range. JPMorgan Chase predicts that due to better-than-expected shipment of DUV lithography equipment, ASML Holding NV ADR will raise its performance guidance for 2026. Although JPMorgan Chase's forecast for ASML Holding NV ADR's second quarter performance is below market consensus, their analysis suggests that short-term performance may not have much significance for the stock price, with the market's focus truly being on 2027. The bank believes that ASML Holding NV ADR's growth in 2027 is expected to significantly exceed the overall growth of the global Wafer Fab Equipment (WFE) market. This was not achievable in 2026 due to late start of customer orders (starting in December 2025), resulting in the supply chain not being able to increase capacity in time to deliver more EUV equipment in 2026. JPMorgan Chase predicts that the earnings per share for ASML Holding NV ADR in 2027 and 2028 will be 54.4 euros and 64.4 euros, respectively, which are 26.5% and 23.8% higher than the current market expectations. At the same time, JPMorgan Chase points out that ASML Holding NV ADR needs to provide strong outlook for the next year in order to end its long-term underperformance compared to its American semiconductor equipment peers. Data shows that since September 2025, despite being the most strategically important and leading supplier of wafer fab equipment globally, ASML Holding NV ADR has lagged behind Applied Materials (AMAT.US) and Lam Research (LRCX.US) by approximately 100-125%, and also lagged behind KLA Corp (KLAC.US) by over 15%. This underperformance is mainly attributed to the valuation gap between ASML Holding NV ADR and its American peers. The current forward P/E ratio of ASML Holding NV ADR is still lower than its historical peak of 45 times, while the valuations of its American peers are 76-86% higher than their respective historical highs. In addition, ASML Holding NV ADR currently has an approximately 11% valuation discount compared to the mentioned American peers, while the historical average premium is about 84%. Considering that ASML Holding NV ADR's weight in major European stock indices is already very high, it is difficult to drive a revaluation of its valuation solely by relying on additional funds from Europe. The company needs to attract incremental funds from American and Asian investors. In order to achieve this, ASML Holding NV ADR must demonstrate a stronger future growth prospect than its American peers to regain the interest of these investors. Therefore, JPMorgan Chase believes that the most crucial issue in ASML Holding NV ADR's performance this time will be how the management evaluates the growth prospects for 2027 (the company previously provided forecasts for 2026 in advance last year, so the bank believes they should also provide guidance for 2027 this year). JPMorgan Chase points out that if ASML Holding NV ADR indicates it can deliver around 90 EUV machines in 2027, it will be a mild positive for the stock price; if it expects to deliver 90 to 100 EUV machines, it will be a very positive driver for the stock price. Furthermore, any signals indicating continued strong demand for immersion lithography equipment will also help improve market sentiment. Additionally, any information about capacity planning for 2028 and beyond, including plans to expand new capacity after 2028, will be highly anticipated by the market. JPMorgan Chase rates ASML Holding NV ADR as "overweight" in the research report, with a target price of $2200. This target price represents a potential upside of about 24% from the stock's closing price of $1768.65 on Wednesday. The bank explains that ASML Holding NV ADR is the only EUV lithography equipment supplier globally, and with a continuous increase in the average selling price (ASP) of EUV equipment, its market share in the lithography equipment market is expected to exceed 80-89%, maintaining its leading advantage over the past decade; the advancement of the High-NA EUV technology upgrade starting in 2027 is expected to further increase the investment in lithography equipment required per wafer. Furthermore, the penetration rate of EUV in the DRAM field continues to increase, serving as a new driver of growth. In the past few quarters, the industry environment has undergone significant changes, with a significant increase in DRAM prices. ASML Holding NV ADR covers all major memory chip makers globally, therefore making it one of the most important beneficiaries in this cycle of the memory chip market prosperity.