Why Europe’s biggest stock just got even bigger
Up 128% in the past year, this mighty stock is flavour of the month again. It’s also a big boost to one of the UK’s favourite investment trusts. Graeme Evans has the details.
15th July 2026 14:02
by Graeme Evans from interactive investor
Christophe Fouquet, CEO of ASML, at the VivaTech trade show in Paris last month. (Photo: Chesnot/Getty Images)
A big upgrade to guidance by ASML Holding NV (EURONEXT:ASML) today ensured Europe’s biggest stock extended its run among the best-performing holdings of Scottish Mortgage Ord (LSE:SMT) Investment Trust.
Alongside forecast-beating second quarter results, the market leader in lithography tools used in semiconductor manufacturing boosted the confidence of followers of the AI bull market by reporting that it planned to increase capacity by 30% over the next year.
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ASML said AI-fuelled customer commitments across its product portfolio had given it much better visibility on longer-term demand, while it reported “extremely strong” order intake in the first half of this financial year. Customers include Intel Corp (NASDAQ:INTC), Samsung Electronics Co Ltd DR (LSE:SMSN) and Micron Technology Inc (NASDAQ:MU).
ASML now expects total net sales for 2026 of between 43 billion (£36 billion) and 45 billion euros with a gross margin in the range of 54% and 56%. This compares with previous guidance of between 36 billion and 40 billion euros and a margin in the 51%-53% range.
Shares in the Netherlands-based company today lifted by another 4%, having jumped by 44% since the end of March and by 128% in the past year.
The latest advance has provided a further boost to FTSE 100-listed Scottish Mortgage, which first took a stake in the former Philips and ASMI joint venture in 1996 and has a 3.1% weighting as one of its key holdings across the chip supply chain.
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ASML delivered the third-biggest contribution to its 2025-26 performance, behind only Space Exploration Technologies Corp Class A (NASDAQ:SPCX) and the Taiwan-based semiconductor foundry Taiwan Semiconductor Manufacturing Co Ltd ADR (NYSE:TSM) and ahead of NVIDIA Corp (NASDAQ:NVDA).
It told investors in this year’s annual report that ASML sat in a deeply protected position where every dollar of the world’s AI ambitions flowed through its order book.
Manager Lawrence Burns added: “Investing in the supply chain is, in effect, a bet on the growth of AI itself, rather than a bet on which company will capture it.
“Whichever applications succeed and whichever frontier models prevail, the underlying compute demand runs through the same handful of companies.
“This is what makes investing in the supply chain such an unusually attractive way to own the growth of AI.”
Scottish Mortgage regards chief executive Christophe Fouquet (pictured) as central to ASML’s next phase, having become chief executive in April 2024 following the retirement of long-time technology leader Martin van den Brink.
It said Fouquet has stressed that innovation remains the engine of ASML’s success, as the company works to extend the boundaries of chipmaking and support the continued advance of computing power.
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He is due to host a capital markets day next June, when ASML will update its long-term views in line with recent market and technology dynamics.
Bank of America said today’s results, which included a 21% year-on-year jump in quarterly revenues to $9.3 billion (£7 billion), were materially above expectations. A gross margin of 54% compared with forecasts of 51.9%, while underlying earnings beat hopes by 13% at 3.45 billion euros.
The bank retained its Buy stance, seeing a further 25% upside to a price target of 2,022 euros.
This support is built around long-term forecasts for high-teens percentage compound revenues growth and earnings per share growth in the high-20s over the next five years.
It added: “ASML has industrialised next gen EUV (Extreme Ultraviolet) lithography technology, which we believe will underpin many of the disruptive trends of this decade.”
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