ASML Surges on Record Orders, Signaling Chipmakers’ AI Spending Spree

ASML Holding reported record quarterly orders that nearly doubled forecaster expectations, the latest indication that semiconductor manufacturers are doubling down on investments in artificial intelligence infrastructure.

The Dutch lithography equipment maker posted orders of €13.16 billion ($15.78 billion) for the December quarter, far exceeding Wall Street forecasts. The company reported net income of €2.84 billion on revenue of €9.72 billion, slightly missing profit estimates of €2.93 billion but beating the €9.57 billion revenue consensus, according to FactSet.

The robust order book underscores sustained demand for ASML’s near-monopoly position in advanced lithography systems, the critical machinery required to produce cutting-edge semiconductors. Taiwan Semiconductor Manufacturing, the world’s dominant contract chipmaker, recently announced plans for multi-year capacity expansion, bolstering sentiment around ASML’s expansion path.

American depositary receipts jumped 6% in premarket trading on Wednesday, extending a rally that has seen shares more than double over the past year.

Given the multimillion-dollar price tags of ASML’s equipment, quarterly revenue can be volatile. Investors are concentrating instead on management’s increasingly optimistic commentary about sustained demand.

“In the last months, many of our customers have shared a notably more positive assessment of the medium-term market situation, primarily based on more robust expectations of the sustainability of AI-related demand,” Chief Executive Christophe Fouquet said in a statement.

The company predicts 2026 sales of €34 billion to €39 billion, up from €32.67 billion last year and above previous guidance for flat growth.

J.P. Morgan analyst Sandeep Deshpande wrote that 2027 estimates appear conservative with “considerable upside,” adding there’s “a high likelihood that spending continues to be strong or stronger” in 2028.

A critical question remains around the adoption of ASML’s newest high-aperture extreme-ultraviolet lithography machines. Taiwan Semiconductor has been noncommittal about purchasing the equipment, suggesting existing technology can be extended. ASML recognized revenue for two of these high-tech systems in the fourth quarter.

“Given record orders, significantly above buy-side expectations and strong 2026 guidance, we expect the shares to meaningfully outperform today,” UBS analyst Francois-Xavier Bouvignies wrote, calling high-NA adoption “the key driver of the next leg of growth.” He maintains a buy rating with a €1,400 price target on Amsterdam-listed shares, which climbed 6% to €1,290.20 Wednesday.

The company declared plans to eliminate approximately 1,700 positions in technology and IT operations, primarily in the Netherlands, with some cuts in the U.S. The reductions, affecting a workforce of over 43,000, intend to streamline decision-making procedures.

ASML also authorized a share repurchase program of up to €12 billion through the end of 2028.