ASML lifted its annual guidance for the second time, projecting sales of 43 billion to 45 billion euros as AI infrastructure spending drives chip makers to buy more of its machines. The Dutch group also raised its gross margin outlook and reported second-quarter sales that beat forecasts.
ASML Holding raised its full-year guidance for the second time, projecting annual sales between 43 billion and 45 billion euros, equivalent to $49.11 billion to $51.39 billion, up from prior guidance of 36 billion to 40 billion euros. The upgrade signals that companies are scrambling for its semiconductor-making tools as the race to build artificial-intelligence infrastructure turns chips into a hot commodity.
The Dutch group supplies machines that use light to print the tiny patterns forming circuits inside modern chips, making it a go-to supplier for Taiwan Semiconductor Manufacturing Co., Samsung Electronics and Intel. As those chip makers face growing demand from their own customers, they need more of ASML's equipment to keep up.
AI spending lifts the outlook
ASML also raised its gross margin forecast, now expecting a range of 54% to 56% against 51% to 53% previously. Chief Executive Christophe Fouquet tied the strength directly to AI, saying investments and progress in the technology are driving demand for advanced logic and memory chips.
Memory demand stands out. Fouquet said ASML's memory revenue should increase by 75% this year, and he added that the company is close to receiving all the orders of extreme ultraviolet lithography systems it needs for next year. Executives are considering a roughly 30% boost to EUV output for 2027 and another 30% increase for 2028, with customers having already placed large numbers of orders.
A record quarter and a European crown
ASML posted second-quarter sales of 9.33 billion euros, up from 7.69 billion euros a year earlier and above the analyst forecast of 8.83 billion euros from Visible Alpha. Net profit grew to 2.92 billion euros from 2.29 billion euros, beating market expectations.
The results cemented ASML as Europe's most valuable listed company by market capitalization, ahead of Novo Nordisk, LVMH and Volkswagen. Its shares have gained more than 68% since the year began and more than doubled over the past 12 months. Even so, semiconductor stocks have climbed to new highs despite bouts of volatility, with some investors worried that valuations and spending on a technology that hasn't yet yielded the expected benefits might be too high.
Source: Morningstar
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