Strong Demand for AI Chips Supports ASML’s Growth

Orders for ASML Holding NV in the fourth quarter significantly exceeded analysts’ expectations, as the rapid development of AI infrastructure boosted demand for the company’s most advanced chip-making machines.

Recorded orders for the fourth quarter reached a record €13.2 billion ($15.8 billion), driven by demand for the most advanced equipment, the Eindhoven, Netherlands-based company said in a statement on Wednesday. By comparison, the average analyst forecast was €6.85 billion, according to Bloomberg data.

ASML is the only manufacturer of the most advanced lithography machines required for producing advanced semiconductors, and its clients include all leading chipmakers, including Taiwan Semiconductor Manufacturing Corp. and Intel Corp. Its equipment is key for producing AI accelerators for Nvidia, which power the training and operation of AI models in data centers. Orders for the Dutch company are a signal of chipmakers’ confidence in future AI demand.

The AI boom continues into 2026, despite concerns over overinvestment, helping ASML’s market capitalization surpass $500 billion earlier this month. Companies like Meta Platforms and Microsoft are investing hundreds of billions of dollars in building data centers, prompting chipmakers to expand capacity and further boosting demand for ASML’s products. TSMC stated this month that it expects capital expenditures exceeding $52 billion in 2026, much of which will be directed toward advanced manufacturing technologies.

ASML’s shares rose by 8.7% in early Tradegate trading compared with Tuesday’s close in Amsterdam and have gained 32% year-to-date.

More than half of the orders in the last quarter were for extreme ultraviolet (EUV) lithography, totaling €7.4 billion, ASML said.

“In recent months, many of our customers have shared a significantly more positive assessment of the medium-term market environment, largely based on more stable expectations for AI-related demand,” said CEO Christophe Fouquet. “This is reflected in a clear increase in their medium-term capacity plans and in our record volume of new orders.”

The company’s total net revenue for 2025 amounts to €32.7 billion. For the current year, revenues are expected in the range of €34–39 billion, representing an upward revision from the previous forecast.

What Bloomberg Intelligence Says
Bloomberg Intelligence analysts expect ASML to reach the upper end of its newly announced revenue target of €34–39 billion in 2026, thanks to strong fourth-quarter 2025 orders and a backlog of chipmaking equipment worth €38.8 billion. Strong TSMC capital expenditures in 2026 will contribute to ASML’s sales growth, along with steady investments from DRAM suppliers such as SK Hynix, Samsung, and Micron.

Last week, Nvidia CEO Jensen Huang described the race to build data centers to power AI models as “the largest infrastructure build in human history.” He said “trillions of dollars” of additional investment would be required in the coming years, speaking at the World Economic Forum annual meeting in Davos.

China remains ASML’s largest market in the fourth quarter, accounting for 36% of net system sales. However, in the future, China’s share is expected to drop to about 20% of revenue, CFO Roger Dassen said during a media briefing.

ASML has never been able to sell its EUV lithography machines to China due to U.S.-led restrictions aimed at limiting the Asian nation’s semiconductor progress. The company is also restricted from selling China its most advanced deep ultraviolet (DUV) lithography machines. Equipment supplied to the Chinese market is approximately eight technology generations behind the latest models. Nonetheless, Chinese chipmakers continue to purchase older machines to produce chips from more mature technology nodes.

ASML announced that it will no longer report new order data in its quarterly reports, as the company believes this metric no longer accurately reflects business dynamics. The company also said it will optimize its technology and IT divisions, signaling upcoming staff reductions.

“We are performing very well and are extremely satisfied with that, but even a very successful company must improve,” said CEO Christophe Fouquet in an interview with Bloomberg TV, adding that the goal is for ASML to become more “agile.”