ASML Beats Q3 Estimates, Raises 2026 Outlook as AI Boom Drives Capacity Expansion Talks Beyond 2028

ASML Holding N.V. (NASDAQ:ASML) reported strong third-quarter 2026 results and raised the lower end of its full-year sales outlook as accelerating AI investment pushed customers to expand equipment plans. The Dutch chip equipment maker generated €11.7 billion ($13.42 billion) in quarterly sales, topping analysts’ expectations of $13.18 billion. and €5 billion ($5.60 billion) in net income. Gross margin reached 57.5%, exceeding the company’s previous expectations. The third-quarter EPS was €12.95. In USD, the EPS was $14.88, exceeding the analyst estimate of $12.47. Read Also: Broadcom CEO Says Many AI Investors Have ‘No Clue,’ Likens Boom to a Casino Sales Outlook Raised on AI Demand ASML projects fourth-quarter sales of €14.2 billion (about $15.91 billion) to €15.2 billion (about $17.04 billion). The upper end of the range is more than the LSEG consensus estimate of €14.2 billion, CNBC reported. The company expects gross margin near 57%. The company now expects full-year 2026 sales between €44 billion ($49.31 billion) and €45 billion ($50.43 billion), up from its previous guidance range of €43 billion to €45 billion. CEO Weighs Capacity Expansion President and CEO Christophe Fouquet said customers are lifting short- and medium-term forecasts because of anticipated artificial intelligence (AI) investment. Some customers are already discussing equipment orders for 2029 and 2030, Fouquet said. ASML believes currently planned supply for 2027 and 2028 will not meet demand and is exploring expansion beyond its previously announced 30% increase in 2028 capacity. ASML is the world’s sole maker of Extreme Ultraviolet (EUV) lithography systems and a dominant leader in Deep Ultraviolet (DUV) machines. AI Demand, Funding Risks and China Curbs The results arrive after Fouquet said last week that the semiconductor industry has shifted from expecting a flat market to scrambling to meet surging AI demand. He expects AI infrastructure spending to drive chip demand for another two to five years, potentially beyond 2028, while most orders for ASML’s advanced chipmaking machines are already scheduled for delivery in 2028, according to JPMorgan. However, industry expansion faces potential financing pressure. Broadcom Inc. (NASDAQ:AVGO) CEO Hock Tan warned that capital could become the semiconductor industry’s biggest constraint as companies fund AI infrastructure and chip production. ASML is also navigating geopolitical risk. In a September report, Fouquet said that while some technology restrictions may be necessary for national security, overly broad curbs could push China to accelerate the development of domestic alternatives. He cited Huawei’s growing role in China’s deep ultraviolet (DUV) lithography technology as evidence of how restrictions could encourage competing technologies. Benzinga’s Edge Rankings place ASML in the 92nd percentile for quality and the 74th percentile for growth, reflecting its strong performance in both areas. Benzinga’s screener allows you to compare ASML’s performance with its peers. Price Action: On a year-to-date basis, ASML shares surged 60.56%, as per Benzinga Pro. On Tuesday, it closed 1.86% lower at $1,717.76. Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Read Also: Nvidia Loses Ground in China as Huawei's AI Chip Shipments Nearly Double, Capturing 28% Market Share: Report Image via Shutterstock