ASML raises 2026 guidance after Q1 beat as AI drives chip equipment demand

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Earnings

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Updated 1 month ago

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$ASML $TSM

Briefing

ASML beat first-quarter revenue and profit expectations and lifted its full-year 2026 sales guidance to between €36 billion and €40 billion, up from the prior range of €34 billion to €39 billion, citing sustained demand for chip-making equipment from AI-driven semiconductor investment. The upgrade comes even as China's share of global shipments continued to decline and the company flagged the risk of a further round of US export controls targeting China. The Dutch company's second-quarter sales outlook came in below expectations, tempering the positive headline.

ASML raises 2026 guidance after Q1 beat

ASML beat first-quarter revenue and profit expectations and raised its sales guidance for 2026, according to results published on 15 April, as chip makers continue to invest heavily in the semiconductor manufacturing equipment the Dutch company exclusively supplies. The company now projects net sales for the full year to fall between €36 billion and €40 billion, up from its previous forecast of between €34 billion and €39 billion issued in January. The company's second-quarter sales outlook, however, missed analyst expectations, contributing to a fall in the stock.

New orders rose sharply, driven by surging demand linked to artificial intelligence infrastructure build-out. ASML's key clients — TSMC, Samsung and Intel — have each committed substantial capital expenditure programmes to expand advanced chip capacity, sustaining order flow into the equipment supply chain.

The guidance upgrade arrives despite a continuing decline in China's share of global shipments, a trend that reflects tightening export restrictions on advanced equipment sales to Chinese customers. ASML also flagged the potential for a further round of US export controls targeting China, introducing an additional layer of uncertainty around a market that had previously been a significant source of revenue.

ASML holds a monopoly on extreme ultraviolet lithography machines, which are required to manufacture the most advanced logic chips. That position means its order book functions as a leading indicator for the broader semiconductor capital expenditure cycle. A guidance upgrade at this stage of the year carries weight: it suggests foundry customers have not materially pulled back spending plans despite trade policy uncertainty and concerns over end-market demand.

The upward revision to full-year 2026 guidance contrasts with caution elsewhere in the technology supply chain. TSMC's own forward guidance, issued around the same period, has reinforced that signal, with strong forecasts from both companies pointing to the AI spending boom remaining intact. The softer near-term Q2 outlook, however, introduces some caution about the pace of order conversion in the months immediately ahead.

Analysis

ASML raising guidance while TSMC reported a 35% revenue jump confirms that AI-driven semiconductor capex is not being deferred despite US-China trade friction and macro uncertainty. This removes the bear case that foundry customers were quietly pulling back orders, and lifts the read-through for ASML's upstream suppliers in specialty gases, photomasks, and precision optics, as well as downstream fabless designers dependent on TSMC advanced node availability.
ASML's order book upgrade, combined with TSMC's record revenue, signals that AI infrastructure spending is proving durable enough to absorb the geopolitical risk premium that had been suppressing semiconductor valuations. Intel is the outlier: it appears in ASML's client list but its foundry ambitions remain structurally behind TSMC. A rising capex tide from ASML guidance does not lift Intel symmetrically, and the gap between TSMC's execution and Intel's foundry ramp widens with each cycle.
The combination of ASML's guidance upgrade and TSMC's record quarter arriving during active US-Iran conflict and Hormuz disruption demonstrates that AI infrastructure capex is decoupled from the macro risk factors currently suppressing other sectors. This decoupling is a direct contradiction of the broad equity market narrative, where the S&P 500 recovery was flagged as fragile and asymmetrically downside-skewed. Semiconductor equipment and advanced foundry names now have a fundamental earnings support that most other sectors lack in the current environment.

Connected Events

Earnings · 2 months ago

TSMC Q1 2026 revenue jumps 35% to record high on AI chip demand

TSMC reported a 35% year-on-year revenue jump to a record high in Q1 2026, driven by AI chip demand from Apple and Nvidia. ASML's guidance upgrade now provides the supply-side confirmation that TSMC's demand signal was not a pull-forward: foundry customers are sustaining capex commitments into the equipment lead-time window, which extends well into 2027.

Earnings · 2 months ago

Applied Digital Q3 revenue surges triple digits but net loss widens on costs and one-time charge

Applied Digital's triple-digit revenue growth alongside a widening net loss showed AI infrastructure economics remain stressed at the operating level even as demand grows. ASML's guidance upgrade confirms the demand side is real, but the margin compression at infrastructure operators like APLD means the capex cycle is being funded by hyperscalers and foundries rather than independent data center operators, concentrating the equipment order flow around a smaller set of well-capitalized buyers.

Markets · 2 months ago

S&P 500 and Nasdaq hit fresh records as Intel surges and US-Iran talk hopes lift markets

The S&P 500 recovery was assessed as fragile and downside-asymmetric due to unresolved Hormuz disruption. ASML's guidance upgrade provides a countervailing fundamental anchor: semiconductor equipment and AI infrastructure capex are generating earnings upgrades independent of geopolitical resolution, giving the market a harder earnings floor in the technology sector than the diplomatic-sentiment-driven recovery alone would support.

ASML raises 2026 guidance after Q1 beat

Analysis

Connected Events

TSMC Q1 2026 revenue jumps 35% to record high on AI chip demand

Applied Digital Q3 revenue surges triple digits but net loss widens on costs and one-time charge

S&P 500 and Nasdaq hit fresh records as Intel surges and US-Iran talk hopes lift markets

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