ASML’s €1.3 Billion Mistral Bet and €12 Billion Buyback Mask a High-NA EUV Delay

ASML beats Q1 estimates, raises guidance, and invests €1.3B in AI startup Mistral, while ramping EUV output 36% and boosting shareholder returns.

ASML Holding is firing on multiple cylinders—ramping up production of its standard EUV lithography systems, pouring €1.3 billion into an artificial-intelligence startup, and returning billions to shareholders—yet the Dutch chip-equipment giant faces a pair of headwinds that could test its momentum.

The company plans to build at least 60 standard EUV systems in 2026, a 36% jump from the number sold last year, driven by what Chief Executive Christophe Fouquet calls “unprecedented demand” from chipmakers racing to build AI-capable semiconductors. The production target underscores the structural shift underway: more than 3,000 new data centers are under construction or in planning across the United States alone, providing a multiyear tailwind for ASML’s order books.

First-Quarter Results Beat Expectations

ASML posted first-quarter 2026 revenue of €8.8 billion, up 13% from a year earlier, with net profit climbing to €2.8 billion. Earnings per share rose 19% to €7.15. EUV systems alone contributed more than €4.1 billion to quarterly sales, including two units of the new high-NA generation with enhanced numerical aperture.

The strong performance prompted ASML to lift the lower end of its full-year revenue guidance to €36 billion from €35 billion, while keeping the upper band at €40 billion. For the second quarter, the company expects revenue between €8.4 billion and €9 billion, with a gross margin of 51% to 53%—a slight dip from the first quarter’s 53% margin that has already caught analysts’ attention.

A Bold AI Wager

On the sidelines of its annual general meeting on April 22, ASML disclosed details of a major strategic bet on artificial intelligence. The company invested €1.3 billion as lead investor in French AI startup Mistral AI’s Series C funding round, securing an approximately 11% stake. Chief Financial Officer Roger Dassen, who took a seat on Mistral’s Strategic Committee, outlined the rationale: embedding AI deeply into ASML’s own products and operations.

One early result is striking. Diagnosing a wafer-stage error that previously took more than ten hours now requires just eight minutes, using a model co-developed with Mistral. The partnership aims to replicate such efficiency gains across ASML’s manufacturing and service processes.

Shareholder Returns Accelerate

ASML is rewarding investors with a dual payout. The company confirmed a full-year dividend of €7.50 per share for 2025, a 17% increase, with the final installment of €2.70 per share to be paid on May 5, 2026. A quarterly dividend of $3.1771 per share was also declared, up from $1.88 previously.

The board has secured authorization to buy back up to 10% of outstanding share capital through October 2027, complementing an existing €12 billion buyback program running from 2026 to 2028. In the first quarter alone, ASML repurchased €1.1 billion worth of its own shares.

The stock has responded favorably, gaining roughly 26% since the start of the year to close Friday at €1,240.80—just 4% below its 52-week high.

High-NA EUV Faces a Timeline Shift

Not all news is positive. Key customer Taiwan Semiconductor Manufacturing Co. has pushed back the broad deployment of high-NA EUV systems to 2029, a delay that tempers near-term expectations for ASML’s most advanced product line. The company’s core business of standard EUV machines, however, continues to run at full throttle.

Geopolitical Clouds Gather

The political landscape is growing more complicated. China’s share of ASML’s revenue has fallen from 41% in 2024 to 33% in 2025, and the company expects it to drop to around 20% in 2026. CFO Dassen argues that supply restrictions in a tight market are being offset by higher capacity investments elsewhere.

But a new legislative threat looms. The so-called MATCH Act, introduced by a bipartisan group of U.S. lawmakers, would ban ASML from selling DUV machines to Chinese chip companies. The bill still needs to pass Congress, and its trajectory remains a key uncertainty for the stock.

The next quarterly results are expected around July 18, 2026. Until then, weekly buyback disclosures and fresh developments on the DUV export front are likely to drive the share price.