ASML delivered a second-quarter report that beat expectations across the board, raised its full-year outlook, and offered an unusually clear capacity expansion plan for 2027 and 2028, giving Wall Street a fresh basis to argue that AI-driven chip demand is not fading.
The market reaction was immediate. ASML shares in Amsterdam rose about 4%, while Nasdaq 100 futures gained roughly 40 basis points. SK Hynix’s Seoul-listed stock jumped 8.8%, adding to the 27% advance previously seen in its American depositary receipts.
Second-quarter numbers and guidance both beat expectations
ASML reported second-quarter revenue of 9.3 billion euros, above the Bloomberg consensus of 8.9 billion euros. Gross margin came in at 54%, well above the company’s own 51% to 52% guidance range. It then raised 2026 full-year revenue guidance from 36 billion-40 billion euros to 43 billion-45 billion euros, with the midpoint roughly 11% above market consensus. Full-year gross margin guidance was also lifted to 54%-56%.
According to a Goldman Sachs note, second-quarter revenue totaled 9.327 billion euros, 6% above consensus. EBIT reached 3.456 billion euros, 13% ahead of consensus, and earnings per share were 7.58 euros, about 11% above expectations. Gross margin at 54% was not only above the top end of prior guidance, but also around 230 basis points ahead of consensus.
Third-quarter guidance also surprised to the upside. ASML expects revenue of 11 billion-12 billion euros in the third quarter, with the midpoint about 11% above consensus, and gross margin of 55%-57%. JPMorgan said the 11.5 billion euro midpoint for revenue was 12% above consensus, while the 56% gross margin midpoint was 350 basis points higher. On that basis, third-quarter EBIT would be around 26% above market expectations.
Installed Base Management stood out in the quarter
JPMorgan analyst Sandeep Deshpande said part of the earnings beat came from Installed Base Management, or IBM. Revenue from that segment was about 300 million euros above expectations. He said software-led productivity upgrades and the continued expansion of the EUV service installed base should drive more than 30% growth in the business this year, providing added support for gross margin.
Capacity roadmap reset 2028 earnings expectations
The main focus for investors was management’s guidance on capacity expansion in 2027 and 2028. ASML said low-NA EUV capacity, which is expected to be about 65 systems in 2026, will rise by roughly 30% to about 85 in 2027, and the company is studying another 30% increase to around 110 in 2028. Immersion DUV capacity is set to increase from about 130 systems in 2026 to roughly 169 in 2027 and about 220 in 2028.
Goldman Sachs estimated that the plan implies low-NA EUV shipments of 85 units in 2027 and 110 in 2028, compared with consensus expectations of 85 and 89. For immersion DUV, Goldman put the implied figures at 169 and 220, versus consensus at 137 and 146.
JPMorgan said the 2028 capacity target is already above what it had previously viewed as the highest sell-side estimate. On its rough calculation, if the capacity plan is executed, ASML’s 2028 earnings per share would exceed 65 euros. With Installed Base Management still running strong, actual earnings could be higher. Goldman’s trading desk added that the roughly 110-unit EUV target for 2028 sits in what it called a “super-bullish” range of 110-120 systems, far above the sell-side consensus of around 89.
Goldman also said ASML has effectively secured most of the EUV orders it needs for 2027 and has already received a meaningful number of orders for 2028. Management described order intake as “extremely strong.”
AI demand is expanding across both logic and memory
Management said AI demand is strengthening in both logic chips and memory, supporting customer capacity additions at advanced process nodes.
In advanced logic, ASML said customers are increasing capacity at the 5 nm, 4 nm and 3 nm nodes to meet AI demand, while pushing as aggressively as possible toward 2 nm volume production and preparing for a transition to 1.4 nm. The company expects advanced logic revenue to grow about 25% year over year in 2026.
On the memory side, ASML said tight DDR and HBM supply is pushing customers to accelerate investment. Higher EUV and advanced immersion lithography intensity is also increasing equipment demand. The company expects memory revenue to grow about 75% year over year in 2026.
Goldman’s trading desk said the shift toward HBM4, HBM5 and the advanced 1c and 1d nodes needed for conventional server DRAM marks a structural change in memory manufacturing. It said 1c DRAM now uses more than five EUV layers, while the 1d and 0a generations are planned to adopt EUV across all layers. With deep ultraviolet multi-patterning nearing physical limits, ASML is positioned as a key beneficiary of that transition.
Goldman further argued that the wafer intensity required for HBM is much higher than for conventional DRAM. That double expansion is putting heavy pressure on global fab capacity and could keep memory prices elevated for longer. Given the structural complexity of the transition to advanced nodes, Goldman said bearish calls that memory prices will peak before 2028, or that supply shortages will ease materially, “sound premature.”
Wall Street backed the report, with debate centered on 2027 guidance
Major banks moved quickly after the earnings release. Goldman Sachs maintained its Buy rating and set a 12-month price target of 2,000 euros, implying about 29% upside from the current share price. JPMorgan also kept an Overweight rating with a 1,900 euro target.
Barclays analyst Simon Coles said ASML delivered most of what investors had been looking for. He said the low-NA EUV capacity targets for 2027 and 2028 should reduce debate around whether the company is supply constrained, and added that first-half low-NA EUV orders may have reached as much as 22 billion euros, a record level.
JPMorgan’s Sandeep Deshpande said the fact that ASML did not reach 90 EUV systems in its 2027 target “does not matter,” because the 2028 EUV and DUV capacity outlook was well ahead of expectations. He also said ASML’s roughly 35% revenue growth outlook for 2026 is already above what the market expects for the wafer fab equipment industry as a whole, which in his view means the company is effectively guiding to around 30% growth for the next two years.
Morgan Stanley analyst Lee Simpson said that although ASML no longer discloses order data, management’s description of first-half order intake as “very strong” and customer efforts to accelerate capacity expansion point to strong sales momentum in 2027.
Jefferies analyst Janardan Menon took a more cautious view. He said the company’s comments on the outlook were mixed: strong Installed Base Management revenue and gross margin growth were clearly positive, but the 2027 EUV target was below market expectations, which had risen sharply in recent months.
Oddo BHF said consensus earnings forecasts are likely to rise by about 20% and argued that “ASML remains a story of unmatched technology leadership,” now benefiting from what it described as a fundamentally different AI-driven cycle.