ASML Ends 2025 With Record Orders as AI Spending Remains Healthy — 2nd Update

By Mauro Orru

ASML Holding logged record quarterly orders of its semiconductor-making equipment and said it expects healthy sales growth this year, a sign that client spending to produce advanced chips behind the artificial intelligence boom remains strong despite fears of a market bubble.

The Dutch company booked orders of 13.16 billion euros ($15.85 billion) in the fourth quarter, up from 7.09 billion euros a year earlier and way above analysts' forecast of 6.95 billion euros, according to Visible Alpha.

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 a Visible Alpha forecast of 4.41 billion euros.

This marks the last time that ASML is disclosing 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 on an annual basis.

Still, high fourth-quarter orders show that ASML's clients like Taiwan Semiconductor Manufacturing Co. feel the need to invest in chip-making tools to churn out increasingly sophisticated semiconductors, including those powering AI.

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 and further cementing its position as Europe's largest listed company.

Investors have started to question whether high AI spending from some of the largest technology companies in the world is justified, fearing there is an AI bubble waiting to burst.

Still, higher spending from a client of TSMC's stature shows that demand remains healthy and that it will need to purchase more of ASML's semiconductor-making machines to satisfy demand from its own customers, including Nvidia and Apple.

"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," Chief Executive Christophe Fouquet said. "This is reflected in a marked step-up in their medium-term capacity plans and in our record order intake."

For 2026, ASML is projecting sales between 34 billion and 39 billion euros, up from 32.67 billion euros in 2025. It also expects a gross margin between 51% and 53%. The forecasts show that ASML is now much more sanguine about its prospects than it was a few months ago.

The group 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.

Last year was particularly challenging for a semiconductor industry that had to navigate months of uncertainty after President Trump's 'Liberation Day' tariffs sent governments around the world scrambling to secure trade agreements.

Even though the EU clinched a deal with the U.S., the specter of tariffs has never fully disappeared. Last week, ASML and other semiconductor stocks plunged after Trump threatened 10% levies on various European countries he said were opposed to a U.S. takeover of Greenland. He subsequently called off those tariffs.

ASML reported sales of 9.72 billion euros for the fourth quarter, up from 9.26 billion euros a year earlier. The figure is above analysts' forecast and at the higher end of company guidance.

Net profit grew to 2.84 billion euros from 2.69 billion euros a year earlier, 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.

Gross profit--a closely watched metric for companies operating in the semiconductor industry--came in at 5.07 billion euros, generating a 52.2% margin that beat consensus and came within company guidance.

For the current quarter, the company expects sales between 8.2 billion and 8.9 billion euros, with a gross margin between 51% and 53%.

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

(END) Dow Jones Newswires

January 28, 2026 01:54 ET (06:54 GMT)