The split reaction, a modest early gain in Amsterdam against a weaker Nasdaq session, suggests much of a strong quarter was already priced in (although Nasdaq was heavy after surging CPI ) after the stock’s run this year. Investors may also have wanted a firm commitment on 2028 capacity rather than a study of options. The supply warning reinforces the view that lithography is a bottleneck in the AI build-out, which supports ASML’s pricing power but limits how quickly revenue can grow. Customers trying to secure tools as far out as 2030 points to tight equipment availability across the chip supply chain, although some of that interest may reflect reservation behaviour rather than firm orders.
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ASML’s problem is no longer finding buyers but building machines fast enough, and the market wants to see how it plans to close that gap.
Summary:
Q3 total net sales were a record €11.7bn, up from €9.3bn in Q2, with a gross margin of 57.5% and net income of €5.0bn
Installed Base Management sales came in above guidance at €3.3bn, driving the margin beat
Q4 guidance is sales of €14.2bn to €15.2bn with a gross margin around 57%. Full-year 2026 sales are now seen at €44bn to €45bn, with a margin around 56%
ASML expects its planned supply for 2027 and 2028 will not fully meet customer demand and is studying ways to lift 2028 capacity beyond the 30% increase already flagged
Some customers want to place orders for 2029 and 2030
Shares rose around 2% in early Amsterdam trade to about €1,534, but the Nasdaq-listed stock fell around 3.9% to about $1,650
ASML Holding reported record third-quarter sales on Wednesday and warned that its planned manufacturing capacity for 2027 and 2028 will not fully cover customer demand, as chipmakers continue to expand spending tied to artificial intelligence.
The Dutch lithography equipment maker said total net sales rose to €11.7 billion in the July to September quarter. That was towards the top of its €11 billion to €12 billion guidance range and up from €9.3 billion in the second quarter. Gross margin climbed to 57.5% from 54.0%, ahead of guidance, while net income rose to €5.0 billion from €2.9 billion. The company sold 113 new lithography systems in the period, up from 86 in the previous quarter.
Chief executive Christophe Fouquet said in the company’s results statement that the margin beat was driven by Installed Base Management, ASML’s service and upgrade business. That unit brought in €3.3 billion as customers sought productivity improvements for machines already in use.
For the fourth quarter, ASML expects sales of €14.2 billion to €15.2 billion with a gross margin around 57%. It now sees full-year 2026 sales of €44 billion to €45 billion with a gross margin around 56%, lifting the lower end of the €43 billion to €45 billion range it set in July.
The bigger message concerned supply. Fouquet said customers keep raising their short and medium-term equipment forecasts based on their expectations for the size and duration of AI investment. He added that some customers are interested in placing orders for 2029 and even 2030. Against that backdrop, ASML now expects its current plans for 2027 and 2028 to fall short of demand. It is studying ways to expand 2028 capacity beyond the 30% increase it outlined previously.
ASML also bought back around €4.1 billion of its own shares during the quarter and declared an interim dividend of €1.88 per share, payable on November 4.
The shares gained around 2% in morning trade in Amsterdam, near €1,534. However, the Nasdaq-listed stock fell around 3.9% on Wednesday to about $1,650.
Attention now turns to whether ASML firms up its 2028 expansion plans. Results from major customers such as TSMC will also offer a further read on how long the current equipment spending cycle can run.
Who is ASML?
ASML is a Dutch company, based in Veldhoven in the Netherlands, that makes lithography machines. Chipmakers use these systems to print circuit patterns onto silicon wafers, the step that sets how small, fast and power-efficient a chip can be.
Its importance comes from one product line. ASML is the only company that makes extreme ultraviolet (EUV) lithography machines, which use light with a very short wavelength to print the finest features on today’s most advanced chips. That makes it an essential supplier to leading chipmakers such as TSMC, which produce the processors behind AI data centres. Its newest High-NA EUV systems cost roughly $400 million each.
ASML also sells older deep ultraviolet (DUV) machines, along with a growing service and upgrade business that keeps installed machines running and improves their output.
That central position gives ASML a geopolitical role as well. Export controls limit which of its machines can be sold to China, and the company’s warnings about those rules are closely watched in both Europe and Washington.
The company employs more than 45,500 people, and its shares trade in Amsterdam and on Nasdaq under the symbol ASML.
This article was written by Eamonn Sheridan at investinglive.com.
