ASML Raises 2026 Outlook as AI Chip Demand Lifts Q2 Earnings

ASML Holding (AS: ASML) reported stronger-than-expected second-quarter 2026 earnings on Wednesday, fueled by robust demand for artificial intelligence (AI) chip manufacturing equipment and higher sales from its installed base business. The Dutch semiconductor equipment maker also lifted its full-year revenue forecast, reinforcing confidence in long-term AI-driven growth.

The company posted net income of €2.92 billion, exceeding analysts’ consensus estimate of €2.62 billion. Quarterly net sales climbed to €9.33 billion, up from €8.77 billion in the previous quarter, while gross margin improved to 54%from 53%.

Chief Executive Christophe Fouquet said the quarter outperformed the company’s guidance, largely due to stronger-than-expected Installed Base Management sales. He added that continued investments in AI infrastructure and advances in AI technologies are boosting demand for advanced logic and memory chips, giving customers greater confidence to expand production capacity.

For the third quarter, ASML expects revenue between €11 billion and €12 billion, well above the consensus forecast of €10.10 billion. Gross margin is projected at 55% to 57%.

The company also raised its full-year 2026 revenue guidance to €43 billion to €45 billion, surpassing the market estimate of €39.40 billion. It now expects annual gross margin of 54% to 56%, compared with its previous outlook of 51% to 53%.

Reflecting strong order momentum, ASML plans to increase production capacity for its low-NA EUV lithography systems by 30% in 2027 from its planned 2026 output of about 65 units, while evaluating another 30% expansion for 2028. The company also intends to boost DUV immersion system capacity by 30% in 2027 from around 130 units, with additional expansion under review for the following year.

During the quarter, ASML shipped 86 new lithography systems, up from 67 in the first quarter, while used system sales declined to five from 12.

ASML declared an interim dividend of €1.88 per share, payable on August 5, and repurchased approximately €1.1 billion worth of shares under its 2026–2028 buyback program.

Ahead of the earnings release, analysts remained optimistic despite export control concerns. Morgan Stanley reiterated ASML as a "Top Pick," highlighting resilient DRAM demand, stronger order visibility, and expanding wafer fabrication spending. Bernstein also raised its price target, arguing that adoption of ASML’s High-NA EUV technology, particularly by memory chipmakers, could begin as early as 2027.