ASML Holding N.V., the Dutch semiconductor equipment giant and sole producer of extreme ultraviolet (EUV) lithography machines, reported a massive surge in fourth-quarter orders and issued stronger-than-expected guidance for 2026, signaling relentless demand from chipmakers building capacity for artificial intelligence.
In its Q4 2025 earnings report, ASML announced record-breaking quarterly orders of €13.2 billion, more than double analyst expectations. This figure provides a powerful forward indicator, suggesting an acceleration in customer spending plans rather than a pause. Financial performance for the quarter was solid, with net sales of €9.7 billion, slightly above the consensus estimate of €9.5 billion, and net profit of €2.84 billion.
The company significantly upgraded its 2026 outlook. It now forecasts total net sales for the year to be between €34 billion and €39 billion, with the midpoint above prior analyst estimates. This represents growth compared to 2025 and reflects a clearer path to expansion supported by the robust order book. Earlier commentary had only indicated that 2026 revenue was not expected to fall below the prior year.
Alongside the guidance, ASML unveiled a substantial €12 billion share buyback program scheduled to run until December 31, 2028, reinforcing management's confidence in long-term cash generation.
The demand surge is directly tied to the AI investment wave reshaping the semiconductor supply chain. Major chipmakers supplying processors for data centers and advanced computing are planning substantial capital expenditure increases for 2026: Taiwan Semiconductor Manufacturing Company (TSMC) plans a 37% rise to $56 billion, Samsung Electronics a 24% increase to $40 billion, SK Hynix a 25% boost to $22 billion, and Micron Technology a 45% jump to $20 billion. Analysts estimate about 25% of this spending flows to chip-making tools, with ASML capturing a dominant share due to its monopoly on EUV technology needed for the most advanced AI chips.
John West of Yole Group emphasized ASML's unique position, calling it "the only game in town" for this critical technology. Demand is driven not only by Nvidia but also by firms like Apple, Alphabet, and Qualcomm that need advanced chips for AI systems.
While global AI investment booms, ASML's business in China is undergoing a shift. China accounted for 33% of ASML's net system sales in 2025, driven by a record €3.27 billion in Q4 imports as customers stocked up on deep ultraviolet technology equipment. However, due to export restrictions on its most advanced machines, the company expects China's share of revenue to fall to around 20% in 2026. Investors are watching how growth in other regions, particularly from new fabrication plants serving AI demand, will balance this adjustment.
ASML's stock has performed strongly, doubling since April 2025 and rising about 25% in January 2026 alone. Ahead of the earnings, Bernstein SocGen Group maintained an Outperform rating with a $1,642 price target, citing expectations for a beat. The broader analyst consensus remains strongly positive.
