ASML order surge fuels talk of Europe's first $1tn company

ASML has raised its full-year sales guidance to between €43bn and €45bn after reporting second-quarter net sales of €9.3bn and net income of €2.9bn. The Dutch lithography giant, already Europe’s most valuable listed company at roughly $700bn, is now close to fully booked for 2027.

The surge stems from a global scramble for AI computing power. ASML is the sole manufacturer of extreme ultraviolet lithography machines, the equipment required to print the most advanced chips. Chief executive Christophe Fouquet said the momentum is driven by customers accelerating capacity specifically for AI.

To meet this demand, ASML is cutting assembly times from 22 weeks to as few as 15 while planning a 30% production increase for both its EUV and cheaper deep-ultraviolet machines next year. This monopoly is tightening as chipmakers upgrade to the next generation of technology. Intel became the first to ship commercial chips built with ASML’s newest High-NA systems, which cost roughly $400m each and allow for smaller transistors. Rivals TSMC and Samsung are expected to follow, ensuring ASML remains a mandatory tollgate for the industry.

Investors are now openly debating whether ASML can reach a $1 trillion market capitalisation, a threshold no European company has crossed. The stock has climbed 60% this year, adding over $250bn in value, and trades near 38 times expected earnings. Gaining the remaining $300bn would require a further 40% rise, an outcome analysts at Barclays, Susquehanna and Bernstein have signalled is plausible by lifting price targets toward $2,600.

"I think it has a really good chance of being the first company in Europe to hit the trillion mark," said Carolyn Bell of Stonehage Fleming. "I just don’t know when."

Two familiar risks temper the optimism. Chinese sales, which accounted for half of ASML’s revenue two years ago, are expected to make up only a fifth this year as export controls bite, with a proposed US law threatening further restrictions. Additionally, the company’s order book is inherently cyclical, tied to the capital spending cycles of a handful of hyperscalers.

Despite these vulnerabilities, the strategic importance of ASML’s technology sets it apart from Europe’s usual corporate champions. While the title of the continent’s most valuable company has traditionally rotated among software, luxury and pharmaceutical firms, a hardware monopoly might finally push Europe into the top tier of global tech valuations.