Company Overview
ASML reported impressive Q4 2025 earnings on January 29th—just over a week ago—posting net sales of €9.3 billion (up 24% year-over-year) and net income of €2.7 billion that exceeded analyst expectations. More importantly, the Dutch semiconductor equipment giant raised its full-year 2026 revenue guidance to €30-35 billion (up from previous €28-32 billion), signaling that demand for advanced chipmaking equipment remains exceptionally strong despite macroeconomic concerns.
What makes ASML uniquely compelling is its monopoly position in extreme ultraviolet (EUV) lithography systems—the machines required to manufacture the world’s most advanced chips. ASML is the only company in the world that produces EUV systems, which cost $150-350 million each and are essential for producing chips below 7 nanometers. With AI driving explosive demand for cutting-edge semiconductors from companies like TSMC, Samsung, and Intel, ASML’s order backlog reached €39 billion in Q4, providing multi-year revenue visibility.
Key Technical and Fundamental Drivers
Fresh Earnings Beat → January 29th Results
ASML reported Q4 2025 results just over a week ago showing €9.3B net sales (up 24% YoY) and €2.7B net income, while raising 2026 guidance to €30-35B revenue.
Monopoly Position → Only EUV Provider
ASML is the sole supplier of extreme ultraviolet lithography systems globally, creating an irreplaceable position as the AI chip race drives demand for advanced semiconductor manufacturing.
Massive Backlog → €39B Order Book
Q4 ending backlog reached €39 billion, representing over one year of revenue visibility, with strong orders from TSMC, Samsung, and Intel for next-generation fab buildouts.
AI Chip Demand → Multi-Year Cycle
The global AI infrastructure buildout is driving unprecedented demand for advanced chips, with ASML’s EUV systems essential for producing the 3nm and 2nm nodes required for AI accelerators.
Margin Expansion → 51% Gross Margin
Q4 gross margin reached 51%, demonstrating ASML’s pricing power and operational efficiency, with management projecting margins to remain above 50% throughout 2026.
Market Takeaway
ASML’s January 29th earnings—just over a week old—provide fresh confirmation that the semiconductor equipment cycle remains robust despite periodic concerns about chip inventory corrections. The raised 2026 guidance to €30-35 billion revenue represents potential 15-20% growth from 2025 levels, remarkable for a company of ASML’s scale and maturity. The €39 billion backlog is the key metric, representing locked-in future revenue as chipmakers race to build cutting-edge fabs.
The company’s monopoly position in EUV lithography creates an economic moat that’s nearly impossible to replicate. It took ASML decades and billions in R&D to perfect EUV technology, and no competitor is within years of matching their capabilities. This means every advanced chip manufactured globally—whether for AI, smartphones, or high-performance computing—requires ASML’s machines. As TSMC expands Arizona production, Samsung builds Texas fabs, and Intel pursues its foundry ambitions, all roads lead to ASML. The geopolitical dimension adds complexity, with U.S. export restrictions limiting ASML’s China sales, but this headwind is more than offset by surging demand from other regions. With 51% gross margins and pricing power that allows the company to raise prices annually, ASML offers exposure to the semiconductor super-cycle with best-in-class profitability. The stock’s premium valuation reflects this quality, but for investors seeking exposure to the AI chip infrastructure buildout, ASML represents the ultimate picks-and-shovels play—regardless of which chipmaker wins, ASML supplies the essential tools.