ASML's Installed Base Management Business Picks Up: What's Driving it?

ASML Holding’s ASML upgrade and service business has been a strong contributor to its Installed Base Management (IBM) segment in the first half of 2025 and remained strong throughout the third quarter of 2025. The upgrade business also benefits from lower cost, lower tariff impact and widened gross margin.In 2025, ASML made strong progress in completing a growing number of field upgrades of NXE:3800E systems with 220 wafers per hour configuration. ASML’s second half of 2025 IBM business kept pace with the first half of the year.Earlier in 2025, IBM’s strength was more upgrade-driven and in the second half of 2025, it was toward recurring service revenues. ASML’s expanding Extreme Ultraviolet (EUV) Lithography installed base is increasingly driving service demand. As the company ventures into sub-2nm production with High Numerical Aperture (High-NA) EUV systems, the IBM business is expected to gain in 2026 as well.ASML projects its IBM business revenues to be €2.1 billion in the fourth quarter of 2025. ASML Holding expects fourth-quarter 2025 revenues to be between €9.2 billion and €9.8 billion, suggesting a 26.3% sequential increase. The Zacks Consensus Estimate for ASML’s 2025 revenues indicates 23.7% year-over-year growth.How Competitors Fare Against ASMLASML is effectively the sole player in lithography system upgrades for its own installed base, especially in EUV space. However, in the broader semiconductor equipment market, ASML competes with companies like Lam Research LRCX and Applied Materials AMAT.Lam Research is an established wafer fabrication equipment manufacturer that is established in the memory space. Lam Research’s memory segment, accounting for both Dynamic Random Access Memory and Non-Volatile Memory divisions, is gaining traction on the back of AI.Applied Materials supplies equipment used in chip fabrication, including deposition and etching tools that are essential for both advanced and mature nodes. As chips become more complex with AI and high-performance workloads, Applied Materials’ tools aid in designing and making efficient and smaller node chips.ASML’s Price Performance, Valuation and EstimatesShares of ASML have gained 54.3% in the past six months compared with the Computer and Technology sector’s growth of 19.2%.ASML 6-Month Price Performance ChartImage Source: Zacks Investment ResearchFrom a valuation standpoint, ASML trades at a forward price-to-sales ratio of 12.58X, higher than the sector’s average of 7.46X.ASML Forward 12-Month (P/S) Valuation ChartImage Source: Zacks Investment ResearchThe Zacks Consensus Estimate for ASML’s fiscal 2025 and 2026 earnings implies year-over-year growth of 39.7% and 4.3%, respectively. The consensus estimate for fiscal 2025 and 2026 has been revised upward in the past seven days.Image Source: Zacks Investment ResearchASML currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Just Released: Zacks Top 10 Stocks for 2026Hurry – you can still get in early on our 10 top tickers for 2026. Handpicked by Zacks Director of Research Sheraz Mian, this portfolio has been stunningly and consistently successful.From inception in 2012 through November, 2025, the Zacks Top 10 Stocks gained +2,530.8%, more than QUADRUPLING the S&P 500’s +570.3%.Sheraz has combed through 4,400 companies covered by the Zacks Rank and handpicked the best 10 to buy and hold in 2026. You can still be among the first to see these just-released stocks with enormous potential.See New Top 10 Stocks >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report ASML Holding N.V. (ASML): Free Stock Analysis Report Lam Research Corporation (LRCX): Free Stock Analysis Report Applied Materials, Inc. (AMAT): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks