ASML

ASML generated record total net sales of €11.7 billion in Q3. Management completed price increases for its most critical chipmaking products.

The chip equipment specialist remains in a strong position, given its monopoly in EUV machines. The company is seeing rapid growth as EUV machines are needed to make AI chips, CPUs, and HBM.

ASML plans to increase manufacturing capacity beyond its prior 30% target. Customers are interested in placing orders for 2029 and 2030.

ASML delivered a robust Q3, with sales of €11.66B, gross margin at 57.5%, and net income of €4.96B. Demand for ASML's equipment is running well ahead of planned capacity through 2027–28, with customers already inquiring about 2029/2030 orders. ASML has secured price increases on critical products, expected to structurally lift margins, with full benefit beginning in 2028.

ASML delivered a stellar Q3, with 55% YoY revenue growth and gross margin expanding to 57.5%. Strong customer downpayments signal robust forward demand, with capacity expansion now planned beyond 2028 targets. Management successfully negotiated higher prices for key products, with margin-accretive effects expected from 2027 onward.

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The company-specific signal is that demand is high—so high, in fact, that planned 30% capacity increases over the next two years won't cover it. According to CEO Christophe Fouquet, demand will exceed supply through 2028, pushing the company to make critical decisions.

ASML is now taking orders into 2030 and says supply has exhausted demand through 2028. Micron is a major customer of ASML and its EUV machines are needed to make HBM4 chips.

ASML plans further capacity expansion as AI-driven chip demand outpaces equipment supply, with stronger memory investments and pricing gains shaping its outlook.

ASML's Q3 earnings beat and AI-driven demand signal growth, but revenue misses, capacity constraints and rising costs raise concerns about the stock's outlook.