Shares in ASML Holding NV rose on Wednesday after the Dutch semiconductor equipment maker reported stronger-than-expected second-quarter results, raised its full-year 2026 guidance and outlined plans to expand production capacity to meet surging demand for artificial intelligence (AI) chips.
The stock climbed as much as 7.78% before trimming gains to trade 2.8% higher. Despite the advance, ASML remains below its 52-week high of €1,741 reached on June 30, although its shares have gained about 67% since the start of the year. Its U.S.-listed shares also edged higher after the market opened.
ASML posted second-quarter net income of €2.92 billion, comfortably ahead of analysts’ consensus estimate of €2.62 billion. Net sales increased to €9.33 billion from €8.77 billion in the previous quarter, representing annual growth of 21%, while gross margin reached 54.0%, exceeding market expectations of 51.9%.
Chief Executive Christophe Fouquet said the company had surpassed its own guidance, with stronger-than-expected Installed Base Management sales driving the outperformance.
”The results were driven primarily by higher than expected Installed Base Management sales,” Fouquet said.
Looking ahead, ASML forecast third-quarter revenue of between €11 billion and €12 billion, well above analysts’ expectations of €10.10 billion. The company also expects gross margin to improve further to between 55% and 57%.
ASML raised its full-year 2026 revenue guidance to between €43 billion and €45 billion, significantly above the consensus estimate of €39.40 billion. It also lifted its full-year gross margin outlook to between 54% and 56%, compared with its previous forecast of 51% to 53%.
The latest revision marks the second time this year the company has upgraded its annual guidance after previously increasing its sales outlook to between €36 billion and €40 billion.
Fouquet attributed the improved outlook to sustained investment in AI infrastructure and continued advances in AI technologies, which are fuelling demand for advanced logic and memory chips.
He said customers were accelerating capacity expansion plans, providing ASML with greater visibility into long-term demand, while order intake remained “extremely strong” during the first half of the year.
To support that demand, ASML plans to increase its 2026 low numerical aperture (Low-NA) extreme ultraviolet (EUV) lithography production capacity of around 65 systems by 30% in 2027 and is assessing another 30% expansion for 2028.
The company also intends to expand its deep ultraviolet (DUV) immersion system capacity by 30% from approximately 130 systems in 2026, with a further increase under consideration for 2028.
Chief Financial Officer Roger Dassen said ASML was in discussions with all customers regarding future capacity expansion, including Terafab.
He added that shipments of High-NA EUV systems remained in the low single digits globally but noted that ASML had nearly sold out its EUV production capacity for 2027 and had already secured a substantial number of orders for 2028.
Dassen also said that if China failed to expand semiconductor manufacturing capacity because of restrictions, production would simply shift to other regions as global demand for chips remained unchanged.
During the quarter, ASML sold 86 new lithography systems, up from 67 in the previous quarter, while used system sales fell to five from 12.
The company also announced an interim dividend of €1.88 per ordinary share, payable on August 5, and said it repurchased approximately €1.1 billion worth of shares during the quarter under its 2026–2028 buyback programme. Its next Capital Markets Day is scheduled for June 10, 2027.
The upbeat outlook lifted sentiment across the European semiconductor sector. Shares in Soitec rose 2.3%, Jenoptik gained 3.6% and BE Semiconductor Industries advanced 0.3%.
Analysts responded positively to the results.
BofA Securities maintained its “buy” rating and €2,022 price target, describing the quarter as stronger than expected, supported by robust Installed Base Management sales and improved margins. The brokerage said second-quarter EBIT reached €3.46 billion, 13% above consensus, while earnings per share of €7.60 exceeded expectations by 11%.
BofA also estimated that ASML’s guidance implied fourth-quarter revenue of roughly €14.4 billion, well above consensus forecasts of €11.6 billion. It expects the company to ship 88 EUV systems in 2027 and 105 in 2028.
The brokerage noted that High-NA EUV has entered volume production at Intel Foundry for Intel’s Core Ultra Series 3 processors and projected 25% growth in logic demand and 75% growth in memory sales during 2026. It also expects China to account for about 20% of ASML’s total sales.
Morgan Stanley, which rates ASML “overweight” and names it a “Top Pick”, raised its price target to €1,830 from €1,660, describing the results as a “notable beat and raise”.
The investment bank said the company’s updated 2026 guidance exceeded both market expectations and its own forecasts, while third-quarter revenue guidance implied another quarter of robust growth. Morgan Stanley also highlighted ASML’s planned expansion of Low-NA EUV production capacity to around 110 systems by 2028 as evidence of sustained customer demand extending well into 2027.
