ASML Lifts Revenue Target as AI Demand Offsets China Decline

ASML boosts its 2026 sales target to €40B after a strong Q1, driven by AI demand for EUV systems. Dividend rises 17% and share buybacks continue.

ASML Holding NV has raised its full-year revenue forecast after a stronger-than-expected first quarter, powered by relentless demand for advanced chips needed in artificial intelligence infrastructure. The Dutch semiconductor equipment maker now anticipates 2026 sales of up to €40 billion, a €1 billion increase from its prior target.

The company reported first-quarter net sales of €8.77 billion, a 13% year-on-year increase that landed at the top end of its guidance range. Net profit for the period reached €2.8 billion. Earnings per share came in at €7.15, while the gross margin held firm at a robust 53%.

A significant shift in the product mix underscores the AI-driven demand. Cutting-edge extreme ultraviolet (EUV) lithography systems now account for two-thirds of sales. This technological pivot is helping the company navigate a sharp contraction in its China business, where revenue share plummeted to 19% in Q1 from 49% a year earlier. CEO Christophe Fouquet stated the company’s broad revenue forecast already factors in potential tightening of US export controls, a point of ongoing geopolitical tension.

Shareholders are set to benefit directly from the strong performance. The total dividend for the 2025 financial year is rising by 17% to €7.50 per share. The upcoming Annual General Meeting on Wednesday will vote on the final dividend payment of €2.70. ASML is also aggressively buying back its own stock, repurchasing shares worth approximately €1.1 billion in the first quarter alone.

For the current second quarter, management is targeting revenue of around €9 billion. Looking further ahead, the company aims to achieve annual sales of up to €60 billion by 2030. To meet the chip industry's massive appetite, ASML is ramping up production capacity for its most advanced machines. CFO Roger Dassen outlined plans to deliver 60 low-NA EUV systems in 2026, with that number rising to 80 units the following year.

The AGM in Veldhoven will also see a leadership reshuffle. ASML is appointing a new chief technology officer and extending the contracts of its finance and operations chiefs. Benjamin Loh, former CEO of ASM International, will join the supervisory board.

One notable change drawing analyst scrutiny is the company's new reporting practice. For the first time, ASML did not disclose specific order intake figures. Analyst Ben Barringer of Quilter Cheviot described the move as a "disruption" for the market that investors will need to adjust to. CEO Fouquet offered verbal assurance that order intake remains "very strong."

On the markets, ASML's shares trade near €1,224, having gained almost 24% since the start of the year and hovering close to record highs. With a market capitalization exceeding $570 billion, it retains its position as the most valuable company in the European Union.