ASML Rides on Strength in Installed Base Business: Will it Sustain?
ASML Holding N.V. ASML is benefiting from strong momentum in its Installed Base Management business. Semiconductor manufacturers are aiming to boost the productivity of their existing lithography equipment. This has created a strong growth opportunity for ASML’s Installed Base Management business, which generated 2.8 billion euros in sales in the second quarter, up 31.8% year over year. The result was about €300 million above management's expectations.
The Installed Base Business benefits from the large and expanding number of ASML systems already operating at semiconductor manufacturers. As customers deploy more lithography equipment, the opportunity to provide services, upgrades and field options expands alongside the installed fleet. Continued expansion of the EUV installed base is increasing the company's overall service opportunity.
A major positive for ASML is the nature of current customer demand. Semiconductor manufacturers are attempting to improve productivity and increase output. Upgrades can provide a way to enhance equipment performance without requiring customers to purchase entirely new systems. Software-led upgrades, which can deliver productivity improvements without requiring significant machine time and disruption to production, are gaining traction among customers. Hence, demand is not solely driven by expansion of equipment fleets; service-driven upgrades are also driving growth.
ASML is benefiting from a growing installed fleet, particularly in EUV. The company expects to ship about 65 Low-NA EUV systems in 2026, while EUV revenue is projected to increase roughly 45%. As more EUV systems are deployed, the associated service opportunity also expands. Management expects the combination of upgrade and service revenue to drive more than 30% growth in Installed Base Management sales in 2026. However, sustaining the current pace of Installed Base growth will depend on continued semiconductor investment and customer demand.
Other Major Players in the Semiconductor Space
The semiconductor industry also includes major players such as Monolithic Power Systems MPWR and Applied Materials AMAT, which participate in different parts of the broader semiconductor value chain. Monolithic is gaining content across AI infrastructure as higher current density, module adoption, platform refreshes and new customer ramps expand its role in data-center power. The company continues to differentiate through proprietary process technologies, high power-density products and tighter system integration. Its architecture supports compact silicon and module solutions as customers move toward higher current requirements. Management has extended its capacity goal beyond $6 billion and is adding both front-end and back-end partners to support more complex module and system assembly.
Applied Materials is a leading supplier of equipment used to manufacture semiconductor devices, flat panel displays and solar photovoltaic (PV) products. Applied Materials delivered a record third quarter, with management highlighting the rapid global build-out of AI infrastructure and its strong positioning in leading-edge foundry-logic, DRAM and advanced packaging.
ASML’s Price Performance, Valuation & Estimates
ASML shares have skyrocketed 75.7% over the past year compared with the industry’s growth of 58.6%.
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From a valuation standpoint, ASML trades at a forward price-to-sales ratio of 10.89, lower than the industry tally of 10.97.
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Earnings estimates for 2026 have increased 1.17% to $44.11 over the past 60 days, while the same for 2027 have risen 1.92% to $58.52.
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ASML currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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