Dutch semiconductor equipment giant ASML (ASML) reported blowout Q4 figures on Wednesday. The Amsterdam and New York-listed business unveiled record bookings of €13.2 billion, more than double market expectations of around €6.3 billion.
The surge in orders sent the Amsterdam stock more than 5% higher on Wednesday, as investors responded to the company’s strongest indication yet that AI‑driven semiconductor demand is accelerating.
Quarterly revenue came in at €9.72 billion, slightly ahead of consensus estimates of €9.58 billion. Importantly, gross margin landed at 52.2%, in line with forecasts, according to research commentary and company filings.
| ASML (ASML) | Price: €1,277 | Market cap: €491.37bn |
A substantial portion of the blockbuster order intake, €7.4 billion, was tied to ASML’s cutting‑edge extreme ultraviolet (EUV) lithography systems. EUV represents more than 30 tools and reflects rising investment from chipmakers preparing for next‑generation logic and memory production.
Memory customers accounted for 56% of the order mix, up from 47% in the prior quarter, highlighting growing capacity expansions in DRAM manufacturing.
Job cuts part strategic rethink
Despite the record performance, ASML announced it will cut around 1,700 jobs, primarily in the Netherlands, as part of a restructuring to streamline its technology and IT units. The company said it plans to shift focus toward engineering and innovation, while continuing to hire across manufacturing, sales, and customer‑support operations.
ASML reported China accounted for 36% of Q4 system sales, down from 42% in the previous quarter. Looking ahead, the company expects China to represent roughly 20% of system sales in fiscal 2026, compared with an estimated 33% in 2025, reflecting continued export‑control constraints on high‑end tools.
Backlog and guidance
The company ended the year with an expanded backlog of €38.8 billion, including €25.5 billion in EUV orders. Interestingly, analysts noting a meaningful share of recent bookings appears slated for 2027 deliveries. The growing pipeline underscores long‑term visibility as chipmakers accelerate multi‑year investment plans tied to AI and advanced memory production.
ASML issued fiscal 2026 revenue guidance of €34 billion–€39 billion, with a midpoint pitched at €36.5 billion. That’s above the previous consensus estimate of €35.1 billion. Expected full‑year gross margin stands between 51% and 53%.
For Q1 2026, ASML projected €8.2 billion–€8.9 billion in revenue, exceeding analyst expectations, alongside a gross margin forecast of around 52%.
Within the 2026 outlook, EUV sales are expected to rise significantly, while sales of deep ultraviolet (DUV) systems are projected to hold steady, with weaker China demand offset by strength in advanced logic and DRAM applications.
Strong results and guidance from ASML is a shot in the arm for the wider tech AI industry as more advanced chips and manufacturing capacity comes on stream.
China will remain difficult in the face of US restrictions on advanced tech, which led to price volatility last year. Despite those uncertainties, ASML’s optimism is rightly hitting the spot with investors.
