ASML’s Record High and Revenue Upgrade Mask Shifting Trade Winds as China Retreats and AI Rules Get a Reprieve

ASML shares surge to €1,350.20 after raising full-year revenue guidance to €36-40bn, driven by AI chip demand and High-NA EUV lithography progress.

ASML’s shares stormed to a fresh 52-week peak of €1,350.20 on Friday, capping a week that saw the Dutch lithography powerhouse raise its full-year revenue target to between €36bn and €40bn. The double-barrelled boost reflects a chip industry awash in artificial intelligence spending, with the stock already up 36.62% since January.

First-quarter numbers gave the rally its factual backbone. Net sales came in at €8.8bn, net profit at €2.8bn, and the gross margin hit 53% — the top end of the company’s own guidance. For the current quarter, management expects revenue of €8.4bn to €9.0bn and a gross margin of 51% to 52%, keeping profitability elevated even as product mix and system ramp costs nibble at the edges.

The technological engine of the story remains High-NA EUV lithography, the next-generation toolset that allows chipmakers to etch finer circuits with fewer steps. Intel has already completed acceptance testing of the EXE:5200B system at its Hillsboro facility, a key piece of the 14A process node. Each unit costs between $380mn and $400mn and processes 175 wafers per hour. To date, High-NA systems have handled more than 500,000 silicon wafers with 80% availability, and ASML is targeting 90% by year-end. That ramp is critical: every successful production deployment pulls the revenue mix upward.

The order backlog stands at a comfortable €38.8bn, giving the company strong visibility for the rest of the year. But the geographic composition is shifting. China’s share of ASML revenue peaked at almost 50% in mid-2024; for the current year, the company pencils in just 20%. Growth in South Korea and Taiwan is expected to fill the gap, as those markets expand fabrication capacity for advanced logic and memory chips that rely on EUV.

Capital returns continued apace. ASML reported further share buyback transactions up to May 8, adding to the €12bn programme announced earlier. On the institutional side, Arrowstreet Capital built a new position worth more than $500mn, betting alongside the AI tailwind that has also drawn massive commitments from big tech. Microsoft alone plans to spend roughly $190bn by 2026 on hardware, a large slice of which flows through the chip supply chain.

The political backdrop offers a mix of respite and friction. The European Union has pushed back tough high-risk AI regulations until December 2027, giving companies room to scale infrastructure without immediate compliance costs. Yet US export restrictions on chip equipment to China remain a persistent overhang. And closer to home, the Netherlands has refused to stump up cash for the EU’s proposed multibillion-dollar AI gigafactories, citing high energy prices and inefficiencies — a move that could slow capital deployment on the continent.

Analysts remain largely constructive. Berenberg maintains its buy recommendation, while Erste Group has lifted its earnings estimates for fiscal 2026. The consensus price target stands at roughly $1,504, implying further upside from current levels.

Beyond the immediate horizon, ASML is already sketching the next step. A Hyper-NA concept with a numerical aperture of 0.75 is under feasibility study, with initial lens designs being developed in collaboration with Zeiss. System costs are estimated at around $720mn, targeting chip generations that will arrive in the 2030s. For now, though, the market’s focus is on the current quarter: if ASML can hold margins near the guided band and push High-NA deeper into production, the upgraded annual forecast will rest on solid ground.