ASML jumps 5% after Q2 beat, lifts 2026 outlook on AI chip demand

ASML jumps 5% after Q2 beat, lifts 2026 outlook on AI chip demand

US futures rise on cooling rate fears, strong earnings; Iran strikes continue Investing.com -- Shares in ASML Holding NV jumped over 5% on Wednesday, their biggest one-day gain since June 30, after the Dutch chipmaking equipment supplier reported second-quarter profit and revenue that beat analyst estimates and raised its full-year outlook on strong artificial intelligence-related chip demand. The stock remains below its 52-week high of €1,741.00, reached on June 30, and is up roughly 67% year-to-date. ASML reported second-quarter net income of €2.92 billion, above the IBES consensus estimate of €2.62 billion.

Total net sales rose to €9.33 billion from €8.77 billion in the first quarter, up 21% year-on-year, while gross margin came in at 54.0%, above consensus of 51.9%. Chief executive Christophe Fouquet said the results, which beat company guidance, were "driven primarily by higher than expected Installed Base Management sales." For the third quarter, ASML guided revenue of €11 billion to €12 billion, above the IBES estimate of €10.10 billion, with gross margin expected between 55% and 57%.

The company raised its full-year 2026 revenue forecast to a range of €43 billion to €45 billion, above the IBES estimate of €39.40 billion, with full-year gross margin now seen between 54% and 56%, up from a previous guidance range of 51% to 53%. Fouquet said ongoing AI-related infrastructure investment and progress in AI technologies were driving demand for advanced logic and memory chips, adding that customers were accelerating capacity expansion plans and providing the company with "increased visibility into longer-term demand." Order intake remained "extremely strong" in the first half of the year, he said.

In response to that demand, ASML said it plans to add 30% to its 2026 low-NA EUV lithography system capacity of around 65 units for 2027, and is investigating a further 30% increase for 2028. The company also plans a 30% increase to its 2026 DUV immersion capacity of around 130 units for 2027, with a further 30% expansion under review for 2028. The company sold 86 new lithography systems in the quarter, up from 67 in the first quarter, alongside 5 used systems, down from 12.

ASML declared an interim dividend of €1.88 per ordinary share, payable August 5, and said it repurchased around €1.1 billion of shares during the quarter under its 2026-2028 buyback program. The company confirmed its next Capital Markets Day will be held on June 10, 2027. European chip stocks gained on Wednesday as ASML’s outlook lift rippled across the sector.

Shares in Soitec rose 2.3%, Jenoptik jumped 3.6%, and BE Semiconductor Industries added 0.3%, tracking ASML’s advance as of 03:37 ET (07:37 GMT). It marked the second time this year ASML has raised its annual guidance, having previously lifted its 2026 sales forecast to a range of €36 billion to €40 billion from the company’s original outlook. BofA Securities, which maintained a “buy” rating and a price objective of €2,022, said the results were driven by stronger-than-expected Installed Base Management sales and margins, with second-quarter EBIT of €3.46 billion coming in 13% above consensus and earnings per share of €7.6 beating estimates by 11%.

The brokerage said ASML’s guidance implies fourth-quarter revenue of about €14.4 billion versus a consensus of €11.6 billion, and forecast the company would ship 88 EUV systems in 2027 and 105 in 2028. The company said High-NA EUV had entered volume production at Intel Foundry for Intel’s Core Ultra Series 3 processors, and forecast 25% growth in logic demand and 75% growth in memory sales for 2026, with China now expected to represent about 20% of group sales, according to BofA. Morgan Stanley, which holds an “overweight” rating and "Top Pick" designation, raised its price target to €1,830 from €1,660, calling the results a "notable beat and raise."

The brokerage said ASML’s full-year 2026 guidance, up about 34% year-on-year at the midpoint, came in well above its own €39.4 billion estimate, while the company’s Q3 guidance of €11.5 billion at the midpoint was 12% ahead of the roughly €10.3 billion analysts had expected. Morgan Stanley said the third-quarter margin guidance of 55-57% implied an operating margin of about 42%, versus consensus of around 37%, and pointed to ASML’s plans to expand low-NA EUV capacity to around 110 systems by 2028 as a signal of sustained order momentum into 2027.