Key Highlights

  • ASML shares are trading down 1.95% to $1,684.20, reversing a gain.
  • Q3 gross margin of 57.5% beat estimates on record results.
  • Management raised full year 2026 sales guidance to EUR 44-45 billion.
  • A 3.7% CPI print pushed the 10 year yield above 5.29%.

Record Quarter Meets a Broader Chip Sector Pullback

ASML (NASDAQ:ASML) shares are trading lower despite reporting a record third quarter and raising the low end of its full year 2026 sales guidance to between 44 billion euros and 45 billion euros. Third quarter gross margin of 57.5% beat estimates, while revenue of approximately 11.66 billion euros came in roughly in line to slightly below consensus expectations.

The decline appears tied to broader chip sector weakness rather than company specific concerns, with comments from Chinese memory maker CXMT on speculative artificial intelligence investing weighing on sentiment across semiconductor names, compounded by a hotter than expected September reading, with annual inflation at 3.7%, that pushed the 10 year Treasury yield above 5.29%.

Broader Selloff Drags Down AI Linked Peers

The Nasdaq Composite traded down roughly 1.3% on the session, with AI linked names including CoreWeave (NASDAQ:CRWV) and Oracle (NYSE:ORCL) both trading lower alongside ASML, suggesting the pullback reflects a sector wide repricing of AI infrastructure related valuations rather than weakness specific to ASML's own results.

Pricing Power and Capacity Expansion Support the Longer Term Story

ASML confirmed it completed negotiations on value based price increases for its most critical products, with effects beginning in 2027 and reaching full impact from 2028. Management also noted that planned 2027 and 2028 capacity expansion will not fully meet customer demand, with some customers now requesting order slots for 2029 and 2030.

Outlook: Analyst Targets Remain Broadly Bullish

Despite the day's decline, research firm price targets on ASML broadly range between $2,085 and $2,360, and analyst sentiment remains constructive following the earnings beat and raised guidance, with the stock still up roughly 60% year to date.