Dutch chip equipment manufacturer ASML (AMS:ASML) delivered another impressive quarter, comfortably beating market expectations and, crucially, raising its full-year outlook for the second time this year. The results reinforced ASML’s position as arguably the most important company in the global AI semiconductor supply chain, with demand for its lithography systems continuing to outstrip supply.
For UK retail investors, the key question is no longer whether ASML is a high-quality business—it clearly is—but whether today’s share price already discounts years of exceptional growth.
| ASML (AMS:ASML) | Price: €1,638.20 (+5.3%) | Market cap: €627.83bn |
Q2 2026: Reported results vs expectations
| Metric | Reported | Consensus | Result |
| Revenue | €9.33bn | ~€9.1-9.2bn | ✅ Beat |
| Net income | €2.92bn | ~€2.8bn | ✅ Beat |
| Gross margin | 54% | Above guidance | ✅ Beat |
| Q3 guidance | Above expectations | – | 🚀 Positive |
| FY2026 sales guidance | €43-45bn | Previous €36-40bn | 🚀 Raised |
Source: ASML, analyst consensus.
Revenue growth
ASML 2026 revenue guidance
The upgraded outlook implies roughly 16% annual sales growth at the midpoint, reflecting booming investment by AI chip manufacturers.
Why demand remains so strong
CEO Christophe Fouquet said demand for advanced lithography tools remains ‘extremely strong’, driven by AI infrastructure spending.
ASML remains the only manufacturer of EUV lithography systems, making it effectively impossible to replicate in the near term.
Its largest customers include:
- TSMC
- Samsung Electronics
- Intel
- SK Hynix
- Micron Technology
All are expanding advanced chip production to satisfy exploding AI demand. Reuters also reported that Intel will begin manufacturing Panther Lake processors using ASML’s High-NA EUV machines while memory demand is accelerating rapidly.
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Management commentary
Management highlighted several important themes:
- AI demand continues accelerating rather than slowing.
- Memory customers are returning aggressively after two weak years.
- High-NA EUV adoption is progressing well.
- EUV manufacturing capacity will increase by roughly 30% annually over the next two years.
- The company is approaching full utilisation for future EUV production slots.
What analysts are saying
The market response has been broadly positive.
Bullish arguments
- AI infrastructure spending remains in its early innings.
- ASML’s monopoly in EUV provides exceptional pricing power.
- Higher software and service revenues support margins.
- Long-term visibility remains among the best in global technology.
More cautious views
Some analysts still urge caution because:
- The shares have already enjoyed a substantial rally.
- Any delay in AI datacentre investment could hit equipment orders.
- US export restrictions on China remain unpredictable.
- Semiconductor capital spending is historically cyclical.
Opportunities
| Opportunity | Why it matters |
| AI datacentre build-out | Biggest structural growth driver |
| High-NA EUV rollout | Higher selling prices and technology leadership |
| Memory recovery | Significant additional demand in 2026-27 |
| Service revenues | Stable recurring income stream |
| Limited competition | Effectively monopolistic position in advanced lithography |
Risks
| Risk | Potential impact |
| Premium valuation | Smaller margin for disappointment |
| Export controls | Reduced Chinese demand |
| AI spending slowdown | Lower equipment orders |
| Semiconductor cycle | Earnings remain cyclical despite structural growth |
| Customer concentration | Heavy reliance on a handful of chipmakers |
Is ASML expensive?
Even after today’s strong results, valuation remains the biggest debate.
Analysts still expect high-teens earnings growth over the next few years, but much of that optimism is already reflected in the share price. Consensus forecasts call for revenue growth of roughly 14%-15% annually with earnings growth approaching 19%.
This means ASML can still outperform—but probably only if AI investment remains exceptionally strong.
Investor verdict
For ISA and SIPP investors looking for long-term AI exposure, ASML delivered another impressive quarter and remains one of the highest-quality businesses globally. Unlike Nvidia, which designs AI chips, ASML effectively sells the equipment needed for the entire semiconductor industry to manufacture them.
The upgraded guidance suggests AI investment is broadening beyond GPUs into the manufacturing ecosystem itself, which is encouraging for the wider semiconductor sector.
However, after a powerful share price rally and repeated guidance upgrades, expectations are extremely high. Future gains are likely to depend less on simply beating forecasts and more on continuing to raise them.
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