ASML raises 2026 outlook, warns it can’t meet AI demand

ASML ↗ 2.81% raised its 2026 forecast on Wednesday, October 14, the third increase this year. The company also warned that its current production plans for 2027 and 2028 will not fully meet customer demand for its chipmaking machines as spending on artificial intelligence grows.reuters+1

The Dutch company now expects full-year net sales of 44 billion to 45 billion euros, which lifts the low end from 43 billion euros. It expects a gross margin of about 56%, up from a previous range of 54% to 56%. For the fourth quarter, ASML forecast sales of 14.2 billion to 15.2 billion euros and a gross margin of about 57%. Reuters said that was above the 14.19 billion euros analysts polled by LSEG had expected.marketscreener+2

Record quarter

Third-quarter net sales reached a record 11.66 billion euros, up from 9.33 billion euros in the second quarter and 7.52 billion euros a year earlier. Net income rose to 4.96 billion euros from about 2.13 billion euros a year earlier. Sales came in slightly below the LSEG consensus of 11.72 billion euros. Profit was well above the 4.1 billion euros analysts had expected, according to CNBC. The gross margin of 57.5% beat both consensus and the company's own guidance. ASML said strong demand for productivity upgrades pushed Installed Base Management sales to 3.3 billion euros.cnbc+2

The company sold 113 new lithography systems in the quarter, up from 86 in the second quarter. It also bought back about 4.1 billion euros of its own shares.finance.yahoo

Orders stretching to 2030

"Our customers continue to increase their short- and medium-term equipment demand forecasts with us, driven primarily by their views on the size and duration of AI-related investments," Chief Executive Christophe Fouquet said in the results release. "Some customers are expressing an interest in placing orders with us for 2029 and even 2030."cnbc+1

In July, ASML had planned a 30% increase in capacity for 2027 and was looking at another 30% for 2028. The company now says it is "investigating ways" to raise 2028 capacity beyond that. CNBC reported that Samsung Electronics and TSMC Taiwan Semiconductor Manufacturing Company Limited ↗ 2.95% both committed during the quarter to ASML's next-generation High NA EUV machines. ASML kept its forecast that China will account for 20% of its sales.finance.yahoo+2

Pricing power ahead

Chief Financial Officer Roger Dassen said the company has finished pricing talks with key customers, but higher prices will not show up in the 2026 figures. "It will start to become visible partly in the course of 2027. The full impact of that you will start to see in 2028 and beyond," he said, according to The Wall Street Journal.marketscreener

ASML's U.S.-listed shares fell in the session before the results were released. The stock has risen about 56% this year.finance.yahoo+1