ASML Holding shares climbed more than 5% on Wednesday after the Dutch semiconductor equipment company delivered stronger-than-expected second-quarter earnings.
The company also raised its 2026 outlook as continued investment in artificial intelligence infrastructure increased demand for advanced chipmaking technology.
The move marked ASML’s strongest daily gain since June 30. However, the stock remained below its 52-week high of €1,741, reached at the end of June.
ASML shares are now up approximately 67% since the beginning of 2026.
ASML Q2 Earnings Beat Expectations
ASML reported second-quarter net income of €2.92 billion.
The result exceeded the IBES consensus estimate of €2.62 billion.
Total net sales reached €9.33 billion, up from €8.77 billion during the first quarter.
Revenue also increased by 21% compared with the same period last year.
Meanwhile, ASML’s gross margin reached 54%, comfortably above analysts’ forecast of 51.9%.
Installed Base Sales Drive Stronger Results
ASML Chief Executive Christophe Fouquet said the company’s performance exceeded its own guidance.
He explained that the stronger results were mainly driven by higher-than-expected Installed Base Management sales.
This business includes services, maintenance and upgrades for chipmaking machines already operating at customer facilities.
Such revenue is important because it provides ASML with a more stable income stream alongside new equipment sales.
ASML Issues Strong Q3 Guidance
For the third quarter, ASML expects revenue of between €11 billion and €12 billion.
That forecast is well above the IBES consensus estimate of €10.10 billion.
The company also expects a third-quarter gross margin of between 55% and 57%.
The stronger outlook suggests that demand for ASML’s chipmaking systems and related services will remain elevated during the second half of the year.
ASML Raises 2026 Revenue Forecast
ASML increased its full-year 2026 revenue forecast to between €43 billion and €45 billion.
The revised range stands significantly above the IBES estimate of €39.40 billion.
The company also raised its expected full-year gross margin to between 54% and 56%.
Its previous guidance had called for a gross margin of between 51% and 53%.
This marked the second time in 2026 that ASML increased its annual forecast.
The company had previously lifted its revenue outlook from its original estimate to a range of €36 billion to €40 billion.
AI Chip Demand Supports ASML Growth
Fouquet said ongoing investment in artificial intelligence infrastructure continues to strengthen demand for advanced logic and memory chips.
AI data centres require increasingly powerful processors, memory products and networking equipment.
As a result, semiconductor manufacturers are accelerating plans to expand production capacity.
Fouquet said these developments have given ASML greater visibility into longer-term customer demand.
He also described order intake during the first half of the year as extremely strong.
ASML Plans Major EUV Capacity Expansion
ASML intends to increase its low numerical aperture extreme ultraviolet lithography capacity in response to rising demand.
The company currently expects to produce around 65 low-NA EUV systems in 2026.
It plans to increase that capacity by approximately 30% in 2027.
ASML is also studying another 30% expansion for 2028.
These advanced systems are essential for manufacturing some of the world’s most sophisticated semiconductors.
DUV Production Capacity Will Also Increase
ASML is planning a similar expansion for its deep ultraviolet immersion systems.
The company expects its 2026 DUV immersion capacity to reach around 130 machines.
It intends to increase production capacity by roughly 30% in 2027.
A further 30% expansion is also under consideration for 2028.
The plans suggest that ASML expects semiconductor demand to remain strong beyond the current AI investment cycle.
Lithography System Sales Rise
ASML sold 86 new lithography systems during the second quarter.
That represented a notable increase from the 67 new systems sold during the first three months of the year.
The company also sold five used machines, compared with 12 during the previous quarter.
The rise in new equipment sales reflects growing investment by semiconductor manufacturers in advanced production capacity.
Dividend and Share Buyback Announced
ASML declared an interim dividend of €1.88 per ordinary share.
The payment is scheduled for August 5.
The company also repurchased approximately €1.1 billion of shares during the quarter.
The purchases formed part of ASML’s 2026–2028 share buyback programme.
ASML confirmed that its next Capital Markets Day will take place on June 10, 2027.
European Chip Stocks Follow ASML Higher
ASML’s stronger guidance lifted sentiment across the European semiconductor sector.
Soitec shares gained around 2.3%, while Jenoptik advanced approximately 3.6%.
BE Semiconductor Industries also moved slightly higher, adding around 0.3%.
The gains showed how ASML’s outlook can influence investor expectations across the wider European chip supply chain.
Bank of America Maintains Buy Rating
BofA Securities maintained its “buy” rating on ASML and kept a price target of €2,022.
The brokerage said stronger Installed Base Management revenue and better margins supported the company’s results.
ASML reported second-quarter earnings before interest and taxes of €3.46 billion.
That figure came in approximately 13% above consensus expectations.
Earnings per share reached €7.60, beating analysts’ estimates by around 11%.
BofA Sees Strong Fourth-Quarter Revenue
According to BofA, ASML’s updated guidance implies fourth-quarter revenue of approximately €14.4 billion.
That compares with the current consensus estimate of around €11.6 billion.
The brokerage expects ASML to ship 88 EUV systems in 2027 and 105 systems in 2028.
BofA also said China is now expected to generate around 20% of ASML’s total sales.
High-NA EUV Enters Volume Production
ASML said its High-NA EUV technology had entered volume production at Intel Foundry.
The systems are being used for Intel’s Core Ultra Series 3 processors.
High-NA EUV is designed to support the production of smaller and more advanced semiconductor designs.
The technology is considered an important part of the next generation of chip manufacturing.
Logic and Memory Demand Expected to Rise
ASML expects logic-related demand to increase by approximately 25% during 2026.
The company also forecasts around 75% growth in memory sales.
The stronger memory outlook reflects growing demand from AI data centres, where high-performance memory plays a critical role.
This trend is expected to support ASML’s equipment sales and service revenue over the coming years.
Morgan Stanley Raises ASML Price Target
Morgan Stanley maintained its “overweight” rating and continued to name ASML as a top stock pick.
The bank raised its price target to €1,830 from €1,660.
Morgan Stanley described the earnings release as a significant beat accompanied by a major guidance increase.
At the midpoint, ASML’s revised 2026 revenue forecast represents growth of approximately 34% compared with the previous year.
The figure also came in well above Morgan Stanley’s own estimate of €39.4 billion.
Q3 Forecast Exceeds Analyst Estimates
ASML’s third-quarter revenue guidance has a midpoint of approximately €11.5 billion.
That is around 12% above the €10.3 billion expected by analysts.
Morgan Stanley also noted that ASML’s projected gross margin of between 55% and 57% implies an operating margin of around 42%.
That compares with a market consensus estimate of approximately 37%.
Long-Term Order Momentum Remains Strong
Morgan Stanley highlighted ASML’s plan to increase low-NA EUV capacity to roughly 110 systems by 2028.
The brokerage said the expansion signals strong order momentum extending into 2027 and beyond.
ASML remains a critical supplier to the global semiconductor industry because its lithography systems are required to manufacture advanced chips.
For now, strong AI infrastructure spending, rising memory demand and expanding chip production capacity continue to support ASML’s growth outlook.
