Shares in Chip-Machine Giant ASML Jump as AI Spending Booms — Update

By Mauro Orru

Shares of ASML Holding rose after it logged record quarterly orders and said it expects healthy sales growth this year as client spending to produce the advanced chips behind the artificial-intelligence boom remains strong.

Investors have started to question whether high AI spending from some of the largest technology companies in the world is sustainable.

Still, strong orders for ASML's machines show that big clients are plowing money into tools to churn out sophisticated semiconductors to satisfy demand. The Dutch chip-making equipment supplier counts the likes of Taiwan Semiconductor Manufacturing Co., Samsung Electronics and Intel among its largest clients.

Shares in ASML--Europe's largest listed company--climbed more than 6% in Wednesday midday trade, lifting other semiconductor stocks. ASML's shares have doubled in value over the past 12 months.

The company booked fourth-quarter orders of 13.16 billion euros, equivalent to $15.85 billion, up from 7.09 billion euros a year earlier and well above analysts' forecasts.

Orders of ASML's extreme ultraviolet lithography systems, high-end machines that allow chip makers to print the most intricate layers on semiconductors, came in at 7.4 billion euros, surging past forecasts.

This marks the last time that ASML will disclose quarterly orders. The metric has long been investors' go-to figure to gauge the company's performance, but ASML executives have argued that bookings aren't an accurate reflection of business momentum as they can be lumpy between quarters. From now on, ASML will report its total backlog annually.

Earlier this month, TSMC said it planned $52 billion to $56 billion in capital expenditure this year, 27% to 37% higher than a year earlier. The record spending plans boosted ASML's stock, lifting the group's market value to more than $500 billion for the first time.

"In the last months, many of our customers have shared a notably more positive assessment of the medium-term market situation, primarily based on more robust expectations of the sustainability of AI-related demand," ASML Chief Executive Christophe Fouquet said.

For 2026, ASML is projecting sales between 34 billion euros and 39 billion euros, up from 32.67 billion euros in 2025. Finance chief Roger Dassen told reporters that sales of extreme ultraviolet lithography machines should go up significantly as chips become increasingly sophisticated.

The forecasts show that ASML is now much more sanguine about its prospects than it was a few months ago. The company spooked markets when it said in July ahead of a trade deal between the European Union and the U.S. that it couldn't guarantee growth in 2026 because of tariff-related uncertainty. Executives then backtracked in October, when they said that 2026 sales shouldn't be below the 2025 figure.

Despite record orders and growing sales, ASML said Wednesday that it was planning to slash about 1,700 jobs in its tech and IT operations, mostly in the Netherlands and some in the U.S. The company, which had more than 43,000 employees at the end of 2025, said the cuts were aimed at speeding up decision-making.

The cuts will target roles mainly at the leadership level, ASML said, reducing the number of meetings for employees and giving them more time to focus on their jobs.

"The feedback from our colleagues, our suppliers and our customers shows that our ways of working have, in some cases, become less agile," Fouquet said in a memo to employees. "Engineers in particular have expressed their desire to focus their time on engineering, without being hampered by slow process flows."

ASML's sales rose to 9.72 billion euros from 9.26 billion euros a year earlier, beating analysts' forecasts and coming in at the higher end of company guidance.

Net profit grew to 2.84 billion euros from 2.69 billion euros, slightly below market expectations. ASML said it would declare a total dividend of 7.50 euros per ordinary share for 2025, up 17% on year. ASML also said it was launching a share-buyback program of up to 12 billion euros to be executed by Dec. 31, 2028.

Write to Mauro Orru at mauro.orru@wsj.com

(END) Dow Jones Newswires

January 28, 2026 06:45 ET (11:45 GMT)