Investors are increasingly confident that ASML, Europe’s most valuable publicly listed company, will emerge from its upcoming first-quarter results with strengthened guidance as demand for AI-focused semiconductors keeps orders for its lithography systems at elevated levels. The company’s shares have climbed by more than 40% year-to-date, supported by brisk data centre construction and heavy procurement of state-of-the-art chips by customers such as Nvidia, which depend on ASML’s equipment.
ASML provides lithography machines to chipmakers including Taiwan’s TSMC, which fabricates processors for firms such as Nvidia and Apple. The company is the only supplier of extreme ultraviolet (EUV) lithography systems - tools regarded as essential for manufacturing the most advanced AI chips.
"We’re investing in the picks and shovels of the AI revolution," said Richard Carlyle, equity investment director at Capital Group, whose funds own just over 3% of ASML’s shares. Carlyle said his team is monitoring EUV shipment volumes closely as an indicator of the company’s ability to meet demand.
Expectations heading into the quarter
Analysts are broadly forecasting a robust quarter for ASML and see room for the company to raise its sales outlook for 2026, particularly as memory-chip manufacturers expand capacity to satisfy AI-driven demand. Core issues for the company include whether ASML can scale production of its complex tools - each of which can take more than a year to build - and how potential additional export restrictions to China might affect future growth.
For the first quarter, ASML has provided sales guidance between 8.2 billion and 8.9 billion euros, up from 7.7 billion euros a year earlier. For the full year, the company has forecast revenue of 34 billion to 39 billion euros, versus 32.7 billion euros in 2024. LSEG-polled analysts are forecasting 8.5 billion euros for first-quarter revenue and 37.6 billion euros for the full year.
Several analysts speaking to Reuters said they expect ASML to land near the top end of its stated ranges, as customers either install machines they previously ordered or upgrade existing equipment. "It’s no secret that the quarter will be strong," Morningstar analyst Javier Correonero said, pointing to recent order flows such as SK Hynix’s roughly $8 billion in ASML tool purchases and Samsung placing around $4-5 billion in orders.
Product-line dynamics and competition
Beyond its exclusive EUV franchise, ASML is a significant supplier of deep ultraviolet (DUV) systems, a product line that faces competition from Japan’s Nikon and China’s SMEE. Bernstein analyst David Dai noted questions about whether ASML can keep pace with demand across both EUV and DUV product lines and observed that "DUV, I’d argue is a bigger constraint."
ASML stopped reporting new bookings after the previous quarter, saying that such disclosures produced unnecessary volatility in its share price on earnings days. That decision places more emphasis on the company’s own sales guidance, which analysts say might be raised toward the top half of its 2026 range if demand persists.
China exposure and export-control risk
China is a notable variable in ASML’s revenue mix. In 2025, China accounted for roughly one-third of ASML’s group sales, but that contribution is expected to decline to about 20% this year under the existing export limits. Analysts have cautioned that stricter measures proposed by the U.S. Congress, if enacted in their most comprehensive form, could eliminate less than half of ASML’s remaining sales to China.
Longer-term growth assumptions baked into ASML’s outlook - annual sales gains of 6% to 13% through 2030 - were predicated on the global chip market only reaching $1 trillion in annual sales near the end of that period. Most market participants now expect the industry to surpass the $1 trillion threshold within the current year.
What to watch
- Whether ASML reports first-quarter sales nearer the top of its 8.2-8.9 billion euro range.
- Any upward revision to the company’s full-year revenue guidance for 2026 that would reflect accelerated installations or upgraded orders.
- Updates on EUV shipment volumes and commentary on supply constraints across EUV and DUV systems.
- Further clarity on how export restrictions are affecting sales into China and how management sees the revenue mix evolving.
Exchange-rate context: $1 = 0.8533 euros.