Dutch lithography leader ASML raised its full-year sales and margin guidance for a second time in 2026 after “extremely strong” order intake as chipmakers scale AI-capacity expansions.
ASML reported stronger-than-expected second-quarter results and pushed up its 2026 revenue and gross-margin forecasts after customers accelerated capacity builds to meet AI-chip demand. The company said the guidance raise is driven by sharply higher orders across its EUV and DUV product lines.
Market Reaction
Shares initially jumped more than 7% at the open before trimming gains; they closed the session down 0.49% after earlier intraday volatility. ASML shares have risen about 115% year-to-date, per the source. ASML is Europe’s most valuable company and the sole manufacturer of extreme ultraviolet (EUV) lithography systems used for the industry’s leading-edge chips.
Why It Matters
ASML’s upgraded outlook signals sustained capital spending by foundries and chipmakers to expand production capacity for AI accelerators and advanced logic. CEO Christophe Fouquet said order intake was “extremely strong” in the first half of the year and that customers are accelerating capacity expansion plans — providing ASML increased visibility into longer-term demand.
Context & Background
ASML now expects 2026 net sales of €43 billion–€45 billion and a gross margin of 54%–56%, up from its prior sales range of €36 billion–€40 billion and gross-margin guidance of 51%–53%. The company delivered Q2 net sales of €9.3 billion and net profit of €2.9 billion, beating LSEG consensus estimates of €8.8 billion and €2.6 billion, respectively.
The company plans to add roughly 30% to its 2026 low-NA EUV capacity and 30% to its 2026 deep-ultraviolet (DUV) immersion capacity to meet the surge in orders, Fouquet said. ASML had already raised guidance in April on continued demand for its highest-end EUV machines; the second raise underscores persistent strength across its product portfolio as the AI-driven chip buildout continues.
Customer and Supply-Side Notes
Taiwan Semiconductor Manufacturing Co. (TSMC), a major ASML customer, reported a 68% jump in June sales earlier this week and is expanding its advanced packaging footprint — developments that align with higher equipment orders. Morningstar analyst Javier Correonero told CNBC that ASML is increasing output by optimizing cleanroom space in Veldhoven and making “fast shipments” to accelerate deliveries.
China exposure and export controls
ASML said it still expects China to account for about 20% of total net sales for the year. China’s share fell from 19% in Q1 to 14% in Q2. The company faces export-control and policy risk: proposed U.S. legislation to limit sales of DUV machines to Chinese firms has previously pressured the stock. Correonero noted that restrictions can spur customers to accelerate purchases before limits take effect, briefly boosting demand.
Analyst and Valuation Context
UBS analysts expect the fab buildout and AI-driven demand to support a stronger second half for ASML. Morningstar cautioned that expectations are high: the analyst cited a roughly 50x forward P/E multiple versus Morningstar’s target range of ~35–40x forward P/E, calling current valuation “slightly overvalued.”
What’s Next
ASML said it will update its longer-term goals at a Capital Markets Day scheduled for June 10, 2027. The company will continue to convert strong order visibility into capacity increases through site optimization and expedited shipments, per management comments.
Key Quotes
- CEO Christophe Fouquet: order intake “extremely strong” in H1 as customers accelerate capacity expansion plans.
- CFO Roger Dassen: “The Chinese market is moving in sync with the overall behavior that we see globally.”
Bottom Line for Traders
ASML’s second guidance raise in 2026 and Q2 beats confirm robust, AI-driven equipment demand and improved revenue visibility. Investors should factor in the company’s exposure to geopolitical export constraints and elevated valuation metrics noted by analysts. The announcement reinforces ASML’s central role in the semiconductor supply chain without altering the underlying policy or market uncertainties cited by management and analysts.
$ASML Live Price, Interactive Charts and Performance Graphs
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