ASML Holding NV (NASDAQ:ASML, XETRA:ASME), the world’s largest supplier of chipmaking equipment, posted stronger-than-expected orders for the fourth quarter and raised its medium-term outlook on Wednesday, citing growing confidence among customers in the sustainability of artificial intelligence-related demand.
The Dutch company reported Q4 bookings of 13.16 billion euros, nearly double market expectations, driven by strong demand for its advanced extreme ultraviolet (EUV) lithography systems. EUV orders totaled 7.4 billion euros in the quarter, with 14 systems sold.
Net sales rose 5% year-on-year to 9.72 billion euros, slightly ahead of forecasts, while gross margin came in at 52.2%, topping expectations. Basic earnings per share were 7.35 euros, marginally below analyst estimates.
ASML said customers had become more optimistic about medium-term demand, particularly linked to AI, prompting a step-up in capacity expansion plans.
“In the last months, many of our customers have shared a notably more positive assessment of the medium-term market situation, primarily based on more robust expectations of the sustainability of AI-related demand,” the company said.
That confidence drove ASML’s order backlog to a record 38.8 billion euros at year-end.
For 2026, ASML forecast annual sales of between 34 billion and 39 billion euros, implying growth of about 16% year-on-year at the midpoint, with gross margin seen between 51% and 53%. First-quarter sales are expected to range from 8.2 billion to 8.9 billion euros.
ASML also reiterated its longer-term ambitions, targeting annual revenue of 44 billion to 60 billion euros by 2030, with gross margins of up to 60%.
Despite strong orders, unit shipments fell short of expectations in the quarter, with 102 lithography systems sold, including lower-than-expected volumes across ArFi, ArF dry, KrF and I-line tools. China accounted for 36% of net system sales.
Operating income totaled 3.43 billion euros, broadly in line with expectations, while net income rose 34% quarter-on-quarter to 2.84 billion euros. Cash and equivalents stood at 13.32 billion euros.
The company announced a new share buyback program of up to 12 billion euros running through the end of 2028, and said it plans to streamline its technology and IT organizations, resulting in around 1,700 job cuts, or roughly 4% of its workforce.
ASML shares were up about 5% in premarket trading.