ASML stock is up about 120% year-over-year and nearly 70% year-to-date. It traded higher this morning on strong earnings, then slipped, and turned red by about half a percent as chip stocks came under broad pressure. The results still set off a global chip rally across Asia and Europe.
The Numbers
Second-quarter net sales hit 10.84 billion, above the 10.2 billion expected, a rise of more than 21% from a year earlier. Earnings per share came in at $8.82 versus the $7.98 expected. Net profit was 3.3 billion, better than the 3 billion forecast. Gross margin landed at 54%.
The company raised its full-year guidance for the second time this year. It now expects full-year sales between 49 and 51.5 billion dollars, with gross margins of 54 to 56%, an improvement over the quarter just reported. The earlier forecast called for annual sales of 41 to 45 billion dollars and gross margin of 51 to 53%.
Why Demand Is Rising
CEO Christophe Fouquet said end-market demand has pushed customers to increase their capital spending and speed up their plans. In Logic and DRAM, customers are signing long-term agreements with their own buyers, which pushes them to commit for the long term because they have what he called unprecedented visibility into where the markets are headed.
ASML is Europe's most valuable company and the only company in the world that makes extreme ultraviolet lithography machines, known as EUV, which are used to produce the most advanced semiconductors. That position translated into strong order bookings through the first half of 2026. The company now aims to add 30% to its 2026 low-NA EUV capacity and another 30% to its 2026 deep ultraviolet immersion, or DUV, capacity.
Orders Booked to 2028
Orders for these machines, which are needed to build the chips used in AI applications and data centers, now stretch out to 2028, according to CFO Roger Dassen. The company is close to being fully booked for its 2027 EUV capacity and has already secured a large number of 2028 EUV orders.
Elon Musk's planned Terra Fab chip production facility in Texas is part of those orders and that demand. Dassen said the company is in dialogue with all its customers and knows their building plans, and confirmed Terra Fab is included. The results are another sign that spending on AI infrastructure stays strong.
The Stock Move and a Chip Selloff
The red print may not mean much. In the Netherlands session, the ADRs opened 7% higher before ending flat. Chips were under pressure across the board. Intel traded 4% higher before the open after ASML gave it a mention for using its machines in chip production, then fell 5.7%.
An Example Trade
With semis getting hit hard, one approach looks out to next week in ASML and sells a downside put spread, betting there is support below. The trade sells the 1680/1670 put spread expiring next week, aiming to collect about $4. If the stock falls to that area, 1676 is the break-even point, and that level would be a spot to buy the stock if it drops there.
