Major Funds Increase Stakes in Chip Equipment Leader Amid China Concerns

Several prominent institutional investors significantly expanded their holdings in ASML Holding during the third quarter of 2025, according to recent regulatory filings. This buying activity underscores confidence in the Dutch company's entrenched monopoly in supplying extreme ultraviolet (EUV) lithography systems, a critical technology for advanced semiconductor manufacturing. However, these strategic moves come alongside growing apprehension regarding the firm's substantial exposure to the Chinese market, which is projected to contract sharply in 2026.

Institutional Investors Place Billion-Euro Bets

Recent disclosures reveal a clear trend of institutional accumulation. Fisher Asset Management boosted its stake by 6.3%, bringing its total holding to over 4.2 million shares—an investment valued at approximately €3.4 billion. Amundi executed an even more aggressive expansion, nearly doubling its position to 642,498 shares.

Other asset managers followed suit. Exchange Traded Concepts LLC increased its holding by 30.1% to 13,919 shares, while First Manhattan raised its stake by 61% to over 708,000 shares. Collectively, institutional investors now control an estimated 17% to 18% of ASML's outstanding shares.

Robust Quarterly Performance and Long-Term Ambitions

ASML's operational strength was evident in its Q3 2025 results, which surpassed market expectations. The company reported earnings per share of €5.49 on revenue of €7.5 billion, achieving a gross margin of 51.6%. New orders totaled €5.4 billion, with €3.6 billion attributed to its cutting-edge EUV systems.

Management reaffirmed its full-year 2025 guidance, anticipating revenue growth of around 15% with a gross margin near 52%. Looking further ahead, the company has outlined ambitious targets for 2030, forecasting potential revenue between €44 billion and €60 billion alongside gross margins of 56% to 60%. A key driver for this growth is the ongoing transition from "Low-NA" to more advanced "High-NA" EUV systems, with the unit price escalating from roughly €200 million to over €400 million.

Should investors sell immediately? Or is it worth buying ASML?

Analyst Sentiment Remains Divided

Market experts are not unanimous in their outlook. Among 28 firms covering the equity, three advocate a "Strong Buy," 17 recommend "Buy," and eight maintain a "Neutral" rating. The consensus price target currently stands at €1,171.83.

Recent rating actions include Rothschild & Co Redburn upgrading the stock from "Neutral" to "Buy" in November, and Citigroup reiterating its "Buy" recommendation in December. Conversely, analysts at Barclays and Sanford C. Bernstein continue to hold a neutral stance. The caution exhibited by some is largely attributed to looming challenges in China.

Significant Headwinds Expected from Chinese Market

The most pressing near-term risk for ASML stems from its business in China. Stricter export controls are expected to substantially impact sales to Chinese clients in 2026. This is a notable shift from 2024, when China accounted for 41% of the company's system revenue—a level that is now unsustainable.

Company leadership anticipates a marked decline in demand from the region. Despite this, total revenue for 2026 is not projected to fall below 2025 levels. This resilience is predicated on robust, AI-driven demand from customers outside China. All major chip manufacturers—including TSMC, Samsung, and Intel—rely on ASML's EUV technology to produce their most advanced semiconductors, providing a solid foundation for future growth outside the restricted market.

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