ASML designs and manufactures photolithography systems for semiconductor manufacturing. Its main products are deep ultraviolet (DUV) and extreme ultraviolet (EUV) lithography machines that print circuit patterns on silicon wafers, with EUV enabling smaller features. The company sells these systems to leading chipmakers and earns substantial revenue from installation, maintenance, and upgrades over the machines’ lifetimes. Its goal is to help continue scaling semiconductors by leading in high-end lithography and maintaining strong relationships with customers like TSMC, Samsung, and Intel.
Company Size
10,001+
Company Stage
IPO
Headquarters
Veldhoven, Netherlands
Founded
1984
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ASML raised its 2026 revenue forecast for the third time this year, but a narrow third-quarter revenue miss pushed its shares down 3% in overnight US trading. Micron, SanDisk and Intel fell between 1% and 2.6% alongside it. The Dutch chipmaking equipment maker now expects annual sales of €44 billion to €45 billion, up from €43 billion to €45 billion. It also forecasts a gross margin of about 56%, against a prior range of 54% to 56%. Third-quarter revenue rose 55% to €11.66 billion, or $13.07 billion, just under analysts' $13.12 billion estimate. Net profit climbed to €4.96 billion from nearly €2.13 billion, and earnings per share of $14.51 beat the $12.05 forecast. Chief executive officer Christophe Fouquet said customers keep raising demand forecasts on AI investment, and some want to order for 2029 and 2030.
ASML said some customers want to place orders for its chip tools for 2029 and 2030. The Dutch company made the comment as third-quarter net profit of €4.96 billion beat the €4.1 billion analysts expected. Chief executive officer Christophe Fouquet linked the demand to customers' views on the size and duration of AI investments. Supply planned for 2027 and 2028 will not fully meet demand, he said, and ASML is looking at ways to raise 2028 capacity beyond the 30% increase it had forecast. Net sales were €11.66 billion, against €11.72 billion expected. ASML now expects full-year net sales of €44 billion to €45 billion, and fourth-quarter sales of €14.2 billion to €15.2 billion. Samsung and TSMC also committed to ASML's High NA extreme ultraviolet machines during the quarter.
ASML and TSMC report quarterly results this week, offering clues on the health of the AI trade after the iShares Semiconductor ETF fell for a sixth straight session on Tuesday. Doubts about returns on AI spending, rising bond yields and higher financing costs have weighed on chip stocks. ASML reports before US markets open on Wednesday. Analysts expect third-quarter revenue to rise 23% to $13.12 billion and adjusted profit to climb 39% to $12.05 per share, according to Koyfin. The company raised its 2026 revenue outlook in July. TSMC reports on Thursday. It posted third-quarter revenue of NT$1.49 trillion ($46.7 billion), up 51% year over year. Investors will focus on profit and guidance. Retail sentiment on ASML moved to "extremely bullish" from "bullish," while TSMC's cooled to "neutral," according to Stocktwits.
TSMC needs less revenue growth than ASML to deliver a 10% annual price return over five years, an Insider Monkey analysis finds. At a 30-times earnings exit multiple, TSMC must grow revenue 7.3% a year after 2026; ASML needs 16.7%. The model uses October 12 prices of $444.35 for TSMC and $1,750.24 for ASML. It assumes TSMC's 2026 revenue of $173.84 billion with a 50% net margin, and ASML's €44 billion with a 34% net margin. The result flips if multiples differ. With TSMC at 25 times earnings and ASML at 40 times, the required growth is 11.3% and 10.2%, respectively. TSMC plans $60 billion to $64 billion in 2026 capital spending, and a Taiwan disruption is a risk. ASML faces order timing, export limits, and currency effects.
An analyst at The Motley Fool names four chip stocks to hold for the next decade: Nvidia, Broadcom, Taiwan Semiconductor Manufacturing Company (TSMC), and ASML. The case rests on AI demand for advanced chips. Nvidia's latest quarterly revenue rose 106% to $96 billion, and net income grew 126% to almost $60 billion. Broadcom's revenue climbed 86% to $29.6 billion, with net income up 216% to $13.1 billion. TSMC, which holds a 72.5% share of the advanced chip market according to TrendForce, posted second-quarter revenue of $40 billion, up 36%. ASML, which dominates the machines that make those chips, reported net sales of €9.3 billion, up 21%. Risks include an AI bust and, for TSMC, exposure to Taiwan.