ASML Holding stock was rising after it boosted its sales expectations alongside reporting second-quarter earnings on Wednesday. The chipmaking equipment company is benefiting from an unprecedented wave of investment in semiconductor manufacturing.
ASML is Europe's largest company by market value and holds a near monopoly on lithography machines, which are crucial for manufacturing the most advanced semiconductors.
ASML said Wednesday that it now expects 2026 sales between EUR43 billion and EUR45 billion ($49.1 billion-$51.4 billion). It had previously guided for a sales range of EUR36 billion to EUR40 billion.
"Ongoing AI-related investments and continued progress in AI technologies are driving demand for advanced Logic and Memory chips, further strengthening the semiconductor industry's growth outlook," CEO Christophe Fouquet said in a statement.
Taiwan Semiconductor Manufacturing, the world's most important chip manufacturer, recently said it would make enormous investments in production capacity this year and for several years ahead, which has buoyed investor sentiment toward ASML. Memory-chip companies such as Micron Technology and South Korea's SK Hynix are also investing heavily in manufacturing.
ASML reported a net profit of EUR2.92 billion for the quarter on revenue of EUR9.33 billion. Analysts tracked by FactSet were looking for ASML to report a net profit of EUR2.65 billion on EUR8.90 billion in revenue.
Amsterdam-listed shares of ASML were rising 5.5% to EUR1,642 in early trading Wednesday.
The large price tag of ASML's machines means revenue numbers can swing significantly from quarter to quarter, so investors have tended to focus on its longer term order numbers.
ASML said its order intake was "extremely strong" in the first half of the year and it expects a roughly 30% boost to production of its low numerical-aperture extreme ultraviolet lithography machines next year from around 65 this year, with another potential 30% increase in 2028.
Ahead of the earnings report, analysts at Jefferies had predicted ASML could raise its annual revenue guidance to EUR38 billion-EUR42 billion, on the basis of more than 60 extreme ultraviolet $(EUV)$ lithography machines being shipped this year, rising to around 90 next year.
Jefferies analysts have a EUR1,560 target price on the company's Amsterdam-listed stock. They note the company already trades at a price-to-earnings ratio of 38 times consensus forecasts for its 2027 earnings, which is in line its previous peak valuation.
UBS analyst Francois-Xavier Bouvignies also forecast ASML could shift its guidance toward the upper end of the range, or potentially slightly above. He recently raised his target price on the stock to EUR2,100 with a Buy rating.
One topic of focus for the company's earnings call is likely to be China. ASML is banned from exporting its most advanced tools to China and has previously said it expects Chinese sales to comprise only 20% of 2026 sales. However, it made a similar prediction for 2025 and eventually made a third of its sales to China last year.
The Dutch company's American depositary receipts have risen 66% this year so far through Tuesday's close.
Write to Adam Clark at adam.clark@barrons.com
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(END) Dow Jones Newswires
July 15, 2026 04:19 ET (08:19 GMT)
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