ASML Holding shares dropped 9.5% post Q2 results, with net sales up 23.2% to €7.69 billion and EPS rising 47.1% to €5.90. Despite beating analyst expectations, market reaction was negative due to uncertainty about 2026 and weak Q3 guidance. ASML expects growth in AI-driven demand but projects lower revenues in the near term.

ASML’s caution about 2026 growth and weaker-than-expected Q3 guidance has caused uncertainty. Ongoing U.S.-China tariff discussions and customer hesitation may impact revenue recognition. Despite this, ASML’s dominance in EUV technology and AI-driven demand for advanced chips positions it well for long-term growth.

ASML is a leader in EUV lithography, essential for producing advanced chips at 3nm and below. High-NA EUV technology will be crucial for future chip production, driving sustained demand. Despite short-term uncertainty, ASML’s technological superiority and market position make it worth holding for the long term.

ASML’s stock trades at a reasonable price compared to peers, with a forward P/E ratio of 25.70. While YTD performance has underperformed the sector, ASML remains a strong long-term investment. With strong growth prospects in EUV technology and AI-driven demand, ASML is well-positioned for future growth in the semiconductor market.

Read more at Nasdaq: ASML Stock Declines 9% After Q2 Earnings: Should You Hold or Fold?