ASML, the Dutch semiconductor mega jockey with headquarters in Veldhoven, has outperformed analysts expectations with its second-quarter earnings release. Most important to note, the company’s most important net bookings figure exceeded consensus, suggesting a continued resilience in demand despite increasing headwinds. ASML’s guidance for the current quarter and future quarters is sounding panic buttons. They were below their own revenue guidance expectations and guided down that they would not achieve the same level of growth going forward.
ASML last week reported its third quarter earnings. They’re predicting third quarter revenue to be in the range of 7.4 billion euros to 7.9 billion euros. This projection was well below market expectations, which called for revenue of around 8.3 billion euros. These challenges notwithstanding, ASML booked a whopping 4.19 billion euros on net bookings for the April-June quarter. That figure beat analysts’ estimates and served as further proof of the robust demand for its innovative technology.
ASML has been in the news lately by shipping its next-generation Extreme Ultraviolet (EUV) lithography tools. These clever new tools are collectively called High NA, short for high numerical aperture. These state-of-the-art tools are more than twice the length of a double-decker bus and some can cost more than $400 million apiece. The High NA tools are extremely important for ASML’s growth strategy. Their sheer size enables the production of an ever smaller and more powerful chips.
Shortly after the warm reception afforded its new technology, ASML’s CEO Christophe Fouquet sounded a cynical note about future growth. He pointed out the fundamentals for ASML’s AI customers are still very solid. Counteracting that positive momentum is an increasingly toxic cocktail of macroeconomic and geopolitical developments.
“At the same time, we continue to see increasing uncertainty driven by macro-economic and geopolitical developments. Therefore, while we still prepare for growth in 2026, we cannot confirm it at this stage.” – ASML
Fouquet’s statements help clarify the confusing signals buffeting the semiconductor sector. Today, businesses are in the midst of the ongoing effects of supply chain shocks and a volatility in demand. ASML has definitely helped propel the industry to new heights by developing High NA technology. How external factors will shift its growth trajectory in the short or long term is still an open question.