ASML Raises 2026 Guidance Again: The AI Capex Cycle Is Just Getting Started
ASML's second guidance raise of the year and a 30% capacity expansion plan for 2027 confirm the AI buildout has years to run. The entire semicap sector is surging.
ASML reported Q2 earnings on July 15 and delivered more than a beat. It raised its full-year 2026 revenue guidance by €5 to 8 billion, the second time it has done so this year, and laid out plans for a 30% capacity expansion in 2027 across both EUV and DUV tools, with a further 30% under investigation for 2028. The stock jumped 6.6% in pre-market trading, dragging the entire semiconductor equipment sector higher with it. The message is clear: AI-driven chip demand is not a one-year story, and the tooling bottleneck is tightening.
The Numbers
ASML reported €9.3 billion in Q2 net sales, comfortably above its own guidance of €8.4 to 9.0 billion. Gross margin came in at 54.0%, well above the 51 to 52% range the company had guided. Net income was €2.9 billion.
The beat was driven by higher than expected Installed Base Management sales, the high-margin recurring revenue stream from servicing and upgrading the expanding fleet of EUV tools already in the field.
Q3 guidance points to €11.0 to 12.0 billion in revenue with gross margins of 55 to 57%, confirming the acceleration. Full-year gross margin guidance was also raised to 54 to 56%. ASML also executed €1.1 billion in share buybacks during Q2.
The Capacity Story: This Is the Real News
CEO Christophe Fouquet announced that ASML will add approximately 30% capacity for both Low-NA EUV and DUV immersion tools in 2027, and is investigating another 30% for 2028. In 2026, ASML expects to ship about 65 EUV systems and 130 DUV immersion systems. The 2027 expansion would take those numbers to roughly 85 and 170 respectively.
Fouquet said ASML has seen "very strong order booking" through the first half of 2026, and is "close to receiving all the orders it needs" for 2027. For 2028, customer discussions remain "constructive" with stronger-than-usual visibility into future demand.
This is not a normal supply response. It is a structural recalibration of the industry's tooling capacity. EUV lithography is a monopoly, and ASML is the single chokepoint for every leading-edge chip. When it expands capacity by 30%, it is telling the market that demand will be there to absorb it, and then some.
What Fouquet Said
From the CEO statement released with the results:
"Ongoing AI-related investments and continued progress in AI technologies are driving demand for advanced Logic and Memory chips, further strengthening the semiconductor industry's growth outlook. Our customers, in turn, continue to accelerate their capacity expansion plans."
The key words are "continue to accelerate." This is not stabilization. It is not even steady growth. It is acceleration. Memory customers are sold out for the remainder of 2026 and expect supply constraints "to persist beyond 2026." Logic customers are adding capacity across multiple advanced nodes. High-NA EUV has processed over half a million wafers with greater than 80% availability.
The Read-Through: Who Moves
ASML's numbers are a demand signal for the entire AI capex ecosystem. The pre-market reaction was immediate and broad. Here is how the key names traded as of 7:30 AM ET on July 15:
| Ticker | Price | Change | Role |
|---|---|---|---|
| ASML | $1,840 | +6.6% | EUV lithography monopoly, the direct name |
| LRCX | $355 | +7.5% | Etch and deposition, most levered to memory expansion |
| AMAT | $614 | +6.6% | Broad WFE: deposition, implant, CMP |
| KLAC | $236 | +6.4% | Process control, every EUV fab needs metrology |
| INTC | $111 | +7.2% | 18A ramp requires EUV, Intel is a major ASML customer |
| MU | $977 | +4.3% | DRAM/HBM, EUV for 1b/1c node migration |
| NVDA | $212 | +4.0% | The demand driver, more chips means more litho |
| TSM | $426 | +1.1% | Reports tomorrow, the next catalyst |
Lam Research leading the pack at +7.5% is instructive. Lam is the most memory-exposed WFE name, and ASML's call confirmed that DRAM customers are sold out and accelerating EUV adoption for 1b/1c nodes and HBM production. Every new EUV system drives demand for the etch and deposition tools that surround it.
Intel's +7.2% move is notable. The 18A ramp is a major EUV demand driver, and ASML confirming capacity expansion means Intel's tool supply is more secure. Intel has been under severe pressure, and this is a genuine positive catalyst for its foundry strategy.
TSMC's modest +1.1% reflects the market waiting for TSMC's own earnings report tomorrow, July 16. Morgan Stanley previously flagged that "TSMC CapEx might miss upside solely because ASML is hitting physical EUV shipment shortages." That is a good problem for ASML but could produce a mixed signal from TSMC.
The Longer View
This is the second guidance raise in three months. In January, ASML guided to €34 billion. In April, it raised to €36 to 40 billion. Now it is €43 to 45 billion. That is an €11 billion increase at the midpoint in six months. This is not normal earnings cadence. It is a regime change.
Analyst Ming-Chi Kuo projected ASML revenue at €38 to 40 billion for 2026 and €45 to 47 billion for 2027 back in January. The actual 2026 guidance of €43 to 45 billion exceeds his bull case. His 2027 estimate now looks conservative.
Bernstein reiterated an Outperform rating on July 6, projecting €80 billion in revenue by 2030, a 20% compound annual growth rate, and 2028 earnings per share of €67.44, about 35% above consensus. High-NA EUV is expected to ramp to 125 units by 2030.
The consensus analyst rating on ASML remains Strong Buy, with a mean price target of approximately $1,905, though that figure will almost certainly be revised upward in the next 24 to 48 hours as analysts update models for the new guidance.
Risks
Valuation is the most immediate concern. ASML trades at roughly 60 times trailing earnings and 35 times forward earnings, and the stock had already rallied roughly 50% from its May lows before this morning's report. A Seeking Alpha analyst downgraded the stock to Hold on July 14 purely on valuation grounds.
China export controls remain an unresolved overhang. ASML said the guidance range accommodates potential outcomes of ongoing discussions, but the situation is fluid.
Supply chain execution risk is real. Zeiss SMT, the sole supplier of the precision optics at the heart of EUV systems, must expand in lockstep. Kuo has noted Zeiss is expanding EUV optics capacity by 20 to 25% and DUV by 40 to 50% in 2027, but execution is not guaranteed.
Finally, geopolitics: escalating tensions between the United States and Iran, and the Strait of Hormuz risk, are a macro headwind for all risk assets.
What to Watch
TSMC reports tomorrow, July 16. It is the most important read-through. If TSMC raises its capex guidance, it confirms the demand signal. If it holds steady, the bottleneck narrative shifts: ASML is the constraint, not the beneficiary of unconstrained demand.
Analyst price target revisions will arrive in the next 24 to 48 hours. The current mean target of $1,905 is only about 3.5% above the current price and will need to move higher to reflect the new guidance.
The investor call with Fouquet and CFO Roger Dassen at 9:00 AM ET today will provide additional color on 2027 and 2028 bookings, High-NA customer commitments, and the China export control situation.
The semicap sector is sending an unambiguous signal this morning: the AI buildout is not slowing down. It is accelerating, and the tooling bottleneck is only getting tighter.