ASML beats Q1 estimates, raises 2026 sales outlook as AI-driven chip demand surges

Earnings beat and brighter guidance

ASML posted stronger-than-expected first-quarter results, with net sales of €8.8 billion versus analyst estimates of €8.5 billion and net profit of €2.8 billion compared with estimates of €2.5 billion. The Dutch lithography giant said it now expects 2026 net sales of €36 billion–€40 billion, up from a prior range of €34 billion–€39 billion. Short and sweet: customers are ordering more machines to feed the AI boom, and ASML is reaping the benefits.

Memory sprints to the front

Demand is shifting fast. ASML reported that 51% of net sales of its new tools in the quarter went to memory, up from 30% in the prior quarter. South Korea accounted for 45% of sales, Taiwan 23%. Who’s cashing the checks? Memory makers — and they’re doing it to feed the insatiable appetite of AI systems and data centers. The result: a chip-capacity sprint that’s driving prices and capex plans higher.

Geopolitics narrows one lane

The good news comes with a caveat. ASML still can’t ship its most advanced machines to China because of export restrictions, and it has been reported that a group of bipartisan U.S. lawmakers introduced a bill that would further limit exports of even less-advanced equipment to China. System sales to China plunged to 19% of overall sales in the quarter, down from 36% in the December quarter. It’s a reminder: the chip race now runs on silicon, capital — and geopolitics.

A bellwether with a complicated job

ASML isn’t just selling tools; it’s a kind of economic canary for the semiconductor cycle. When AI demand spikes, ASML’s order book bulges and the industry braces for a capacity arms race. But export rules and regional concentration of demand mean the company must navigate not just technical complexity but political shoals as well. The roar of demand is real — whether the supply side can keep pace is the question everyone is watching.

Sources: cnbc.com