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Europe's crown jewel ASML makes a huge comeback
Ruben Dalfovo
Investment Strategist
Key takeaways
ASML’s rebound looks more than just a relief rally: new orders more than double from Q3 to Q4 2025, with a bigger share tied to memory-chip equipment, hinting at broader chip demand beyond Nvidia-driven AI.
The mix and geography shift: EUV (extreme ultraviolet) tools drive roughly half of revenue, and the US takes a larger share of sales as new capacity builds amid rising geopolitical uncertainty.
Guidance strengthens the “cycle is turning” story: ASML targets EUR 34 to 39 billion revenue for 2026 (above what the market expected) and adds a new share buyback running through 2028.
Europe’s crown jewel, ASML, stages a massive comeback
Over the past five months, ASML has made an impressive comeback, with its stock price more than doubling since September.
This remarkable rally has made ASML the undisputed largest company in Europe by market capitalization. At the same time, it has also become the most AI-exposed stock on the continent, positioning itself right at the heart of the ongoing artificial intelligence boom.
Today’s full-year and Q4 earnings report from ASML confirms that investments in AI remain in full swing. But perhaps even more interestingly, the results suggest that the growth in chip demand is starting to broaden beyond just NVIDIA’s GPUs.
ASML builds the machines that are essential for manufacturing all kinds of microchips. For example, the company supplies advanced equipment to TSMC, which produces chips for NVIDIA. However, with the recent surge in prices for memory chips, it now looks like demand is also picking up in the broader, more traditional chip market.
This trend is clearly reflected in the company’s order intake for the quarter. From the third quarter to the fourth quarter 2025, new orders more than doubled, with a growing share of that coming from equipment used to produce memory chips. This shift highlights a broader industry recovery and a more diversified demand for chip manufacturing tools.
In addition to a strong order book, ASML also delivered a better-than-expected quarter in terms of sales and deliveries of new production systems.
As shown below, EUV systems — the company’s most advanced technology — now account for roughly half of total revenue. At the same time, the U.S. is beginning to represent a larger share of ASML’s sales as new production capacity is being built, likely driven in part by growing geopolitical uncertainty.
Revenue from memory chip equipment currently accounts for only 30%, as the recently mentioned orders — largely fueled by higher memory chip prices — are expected to impact sales more significantly toward the middle or end of 2026.
ASML’s own outlook for both the first quarter (Q1) and the full year 2026 also came in significantly better than expected.
As shown below, ASML is guiding for full-year revenue between EUR 34–39 billion, while the market (Bloomberg analysts consensus) had expected just over EUR 35 billion. At the same time, ASML today announced a new share buyback program running through 2028.
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