ASML Ignites the AI Capex Boom as Orders Smash Estimates and Shares Break Out

Shares of ASML Holding are breaking out this morning after the company delivered a decisive earnings report that reinforced its central role in the global AI buildout. The Dutch lithography giant reported fourth-quarter results that comfortably exceeded expectations on orders, modestly beat on revenue, and came with forward guidance that underscored growing confidence among customers in the durability of AI-driven semiconductor demand. With bookings nearly doubling consensus forecasts and management explicitly pointing to accelerating medium-term capacity plans, ASML’s report has become one of the most important data points of this earnings season for investors tracking the AI infrastructure cycle.

At the headline level, ASML reported Q4 net bookings of €13.16 billion, nearly double the Street’s estimate of roughly €6.85 billion. That figure alone dominated investor reaction, as orders are the cleanest signal of future demand for ASML’s highly specialized and long-lead-time tools. Revenue for the quarter came in at €9.72 billion, modestly ahead of expectations, while net income totaled €2.84 billion, slightly below consensus but largely viewed as a rounding error given the strength elsewhere in the report. Gross margin was 52.2%, squarely within the company’s guidance range and consistent with the view that pricing power remains intact even as ASML ramps production of more complex systems.

The real story, however, was orders and mix. Of the €13.2 billion in Q4 bookings, roughly €7.4 billion came from EUV systems, including the company’s most advanced high-NA EUV tools. ASML also recognized revenue for two high-NA EUV systems during the quarter, an important milestone as these machines represent the next step in leading-edge semiconductor manufacturing. While revenue can be lumpy quarter to quarter due to the size and timing of individual tool deliveries, the magnitude of order intake signals that customers are moving beyond cautious planning and into concrete capacity commitments.

ASML’s results matter far beyond its own income statement because the company sits at the choke point of advanced chip manufacturing. Its EUV lithography machines are essential for producing cutting-edge logic chips and increasingly critical for advanced memory, both of which underpin AI accelerators, data-center processors, and high-bandwidth memory. When ASML sees a surge in orders, it effectively confirms that foundries and memory producers are committing capital to meet future AI demand. That linkage was reinforced this quarter as management repeatedly pointed to AI-related applications — from data centers to broader infrastructure — as the primary driver behind improved customer sentiment.

Management’s forward-looking commentary added fuel to the rally. CEO Christophe Fouquet said customers have shared a “notably more positive assessment of the medium-term market situation,” driven by confidence in the sustainability of AI demand. That shift is now translating into higher medium-term capacity plans and record order intake. ASML guided for first-quarter 2026 revenue of €8.2 billion to €8.9 billion with gross margin between 51% and 53%, comfortably ahead of consensus at the midpoint. For full-year 2026, the company expects revenue between €34 billion and €39 billion, up from €32.7 billion in 2025, with gross margin again in the low-50s. While the guidance range is wide, investors focused on the direction of travel: management now clearly expects 2026 to be another growth year, reversing the more cautious tone that characterized much of the past year.

Orders also provide insight into which parts of the semiconductor ecosystem are driving the cycle. Fouquet highlighted strong demand across logic and memory, noting that the AI buildout is now translating into tangible capacity needs at ASML’s most advanced customers. That includes leading foundries such as Taiwan Semiconductor Manufacturing Company and memory producers tied to high-bandwidth memory. The implication is that AI demand is no longer theoretical or confined to hyperscaler roadmaps — it is showing up in concrete equipment orders that will shape industry supply through 2026 and beyond.

Beyond fundamentals, ASML also announced shareholder-friendly actions that helped support the stock. The company unveiled a new €12 billion share buyback program to be executed through the end of 2028 and raised its planned 2025 dividend to €7.50 per share, a 17% increase from the prior year. While capital returns are not the primary driver of the stock, they reinforce management’s confidence in long-term cash generation even as ASML continues to invest heavily in R&D and manufacturing capacity.

Peers are also moving in sympathy, underscoring ASML’s role as a bellwether for semiconductor capex. Shares of Applied Materials (AMAT) , Lam Research (LRCX), and KLA (KLAC) have all rallied premarket, reflecting expectations that strong ASML orders will eventually translate into broader equipment demand across deposition, etch, and inspection tools. On the customer side, memory and logic names tied to AI capacity expansion are also in focus, as ASML’s bookings suggest a more synchronized upcycle may be forming.

Looking ahead, investors should watch several key factors. First is the pace of high-NA EUV adoption. While ASML has begun recognizing revenue on these systems, large customers have been cautious in publicly committing to full-scale deployments. Even incremental orders could have an outsized impact on long-term revenue and margin mix given the extremely high average selling prices. Second is geographic exposure, particularly China, which accounted for a significant portion of system sales in recent quarters and remains subject to export restrictions. Finally, investors will monitor whether today’s surge in orders translates into sustained backlog growth and revenue visibility through 2026, rather than a single-quarter spike.

In short, ASML’s quarter delivered exactly what a momentum-driven market wanted: undeniable proof that AI-related spending is accelerating, not stalling, at the most critical point in the semiconductor supply chain. With orders smashing expectations, guidance pointing higher, and management striking a confident tone, ASML has reasserted itself as one of the clearest ways to track — and participate in — the global AI infrastructure buildout.