ASML's Q3 2025 Earnings Call: Contradictions Emerge on Market Outlook, 2026 Sales, AI Demand, EUV Tools, and China's Role

The above is the analysis of the conflicting points in this earnings call

Business Commentary:

* Strong Financial Performance in Q3 2025: - ASML reported net sales of €7,500,000,000 for Q3 2025, including the recognition of one High NA system and €2,000,000,000 for installed base revenue. - The company's gross margin for the quarter was 51.6%, and it recorded net bookings of CHF 5,400,000,000, with CHF 3,600,000,000 for EUV. - This strong performance was within guidance and driven by a high level of order intake and installed base revenue.

• Positive Market Outlook and AI Investment:
• ASML's CEO Christophe Fouquet highlighted positive news regarding investments in AI and advanced logic, reducing uncertainties in the market.
• Strong commitments to AI investment are expected to benefit a larger part of ASML's customer base, favoring advanced logic and DRAM.

• The company anticipates that the Chinese market's demand will significantly decrease in 2026, impacting its Deep UV business, but believes AI technology will offset some of these impacts.

• Strategic Partnership with Mistral AI:

• ASML entered a strategic partnership with Mistral AI, contributing an 11% share in the company during its Series C funding round.
• The collaboration aims to improve product performance, precision, and speed, and to enhance product development speed and time-to-market.

• This partnership is seen as crucial for ASML's innovation in software and AI, which are increasingly important components of its hardware offerings.

• Technological Advancements in EUV and 3D Integration:

• The company presented positive progress in EUV, with over 300,000 wafer runs and strong customer adoption.
• ASML shipped its first advanced packaging product, the XT260 scanner, supporting 3D integration with up to 4x productivity compared to existing products.

• These developments demonstrate ASML's technological leadership and commitment to driving innovation in advanced lithography and 3D integration.

• Long-term Growth Opportunities:

• ASML expects its 2030 revenue to reach between EUR44 billion and EUR60 billion, with a gross margin between 56-60%.
• The company sees growth opportunities in AI-driven applications, advanced DRAM, and logic, as well as in 3D integration.
• This optimistic outlook is based on the continued demand for advanced lithography and the potential for AI to enhance product value.