Key Notes
- ASML reported €4.96 billion in third-quarter net income, beating expectations as quarterly sales reached a record €11.66 billion.
- The chip-equipment maker raised the floor of its 2026 sales outlook to €44 billion while retaining the €45 billion ceiling.
- Planned supply is insufficient for customer demand in 2027 and 2028, prompting ASML to investigate a larger capacity expansion.
ASML Holding NV (AMS: ASML; NASDAQ: ASML) shares rose on Wednesday after the Dutch chip-equipment maker reported €4.96 billion in quarterly net income and warned that its planned production capacity would fall short of customer demand in both 2027 and 2028.
The company raised the lower end of its full-year sales forecast to €44 billion from €43 billion, while keeping the upper end at €45 billion. Chief Executive Christophe Fouquet said customers were increasing equipment forecasts as their expectations for artificial-intelligence investment grew, with some already discussing possible orders for 2029 and 2030.
ASML shares were around 2% higher in early European trading, CNBC reported. The earnings release offered a more concrete picture of the AI infrastructure boom: chipmakers want additional manufacturing capacity, but the machinery needed to deliver it remains a constraint.
Profit Beats Expectations as Sales Reach a Record
ASML reported third-quarter net sales of €11.662 billion, up from €9.326 billion in the previous quarter. Net income increased to €4.96 billion from €2.918 billion, while basic earnings per share rose to €12.95 from €7.59.
The comparison with Wall Street forecasts was mixed. Net income comfortably exceeded the €4.1 billion expected by analysts surveyed by LSEG, according to CNBC. Revenue, however, came in slightly below the €11.72 billion consensus, even as it set a company record and approached the top of ASML’s own guidance.
Gross margin reached 57.5%, compared with 54% in the second quarter and above the company’s forecast range. Fouquet attributed the stronger margin to demand for productivity upgrades, which helped the Installed Base Management business generate €3.289 billion in sales.
That division includes services and upgrades to equipment already operating at customers’ factories. Its performance shows that ASML’s growth is coming from more than new machine deliveries: chipmakers are also paying to increase output from systems they already own.
AI Demand Extends Beyond Planned Capacity
Fouquet said customers continued to lift their short- and medium-term equipment requirements, largely because of their assessment of the scale and duration of AI-related spending. ASML now expects its currently planned supply to be insufficient in both 2027 and 2028.
The company is investigating ways to expand 2028 capacity beyond the 30% increase previously discussed. Its earlier plans covered low-numerical-aperture extreme ultraviolet systems and deep ultraviolet immersion equipment, both used in semiconductor manufacturing.
ASML has not announced a new percentage target or said that additional capacity is already secured. Expanding output depends on execution across its own operations and supply chain, making the timing of deliveries an important part of the investment story.
Interest in orders for 2029 and 2030 provides another indication of customers’ planning horizons. It is not equivalent to signed orders, recognized revenue or a guarantee that every proposed chip-factory expansion will proceed.
Upgrades Provide Another Route to More Output
ASML sold 113 new lithography systems during the quarter, compared with 86 in the second quarter. Sales of used systems increased to eight from five. Those figures underline the acceleration in equipment activity alongside the growth in services.
Productivity upgrades offer a complementary way to address demand by helping customers produce more wafers using their installed machines. Fouquet highlighted this portfolio as another source of manufacturing capacity while ASML works on increasing its own output.
For shareholders, the distinction matters. Strong demand can support equipment and service sales, but ASML can only recognize revenue as the relevant delivery and accounting requirements are met. Customer forecasts stretching several years ahead do not remove that timing risk.
Annual Outlook Gets a Higher Floor
The revised €44 billion–€45 billion sales range narrows ASML’s previous €43 billion–€45 billion forecast. It raises the minimum expected outcome without lifting the ceiling, a more measured change than an increase across the entire range.
ASML expects fourth-quarter sales of €14.2 billion–€15.2 billion and a gross margin of around 57%. For the full year, it now anticipates a gross margin of roughly 56%. These remain management forecasts rather than completed results.
The company also bought back around €4.1 billion of shares during the third quarter under its 2026–2028 repurchase program. An interim dividend of €1.88 per ordinary share is payable on November 4, adding shareholder distributions to a quarter of higher sales and profitability.
ASML Rebounds After a Broader Chip Selloff
Wednesday’s rise followed a difficult session for semiconductor shares. ASML had fallen around 3.3% in early European trading a day earlier as a wider chip-sector selloff hit companies including SK Hynix and SoftBank, as we previously reported.
The latest results shift attention back to ASML’s own delivery capacity and earnings. Its customers are signaling substantial demand, and upgrades are already lifting profitability. The unresolved question is how quickly the company can turn that demand into additional systems without letting manufacturing constraints delay the growth investors expect.
