ASML Holding NV (AMS:ASML) raised its full-year 2026 revenue outlook on Wednesday, signaling a robust second half driven by strong demand for advanced chipmaking equipment. The Dutch semiconductor equipment giant now expects full-year sales between €43 billion and €45 billion, up from its previous forecast. This implies a fourth-quarter revenue range of €12.9 billion to €15.9 billion, which would mark a new quarterly record, surpassing the previous high of €9.72 billion set in the fourth quarter of 2025.
For the second quarter, ASML reported revenue of €9.33 billion, a 21.3% increase year-over-year and above the market consensus of €8.80 billion. Net income rose 27.4% to €2.92 billion, beating analysts' expectations of €2.62 billion. The company's operating margin expanded to 37.1% from 34.6% a year earlier, driven by a strong performance in its installed base business.
Service and field-option sales, which include upgrades and maintenance for existing tools, surged 31.8% year-over-year to €2.76 billion, accounting for 29.6% of total revenue. CFO Roger Dassen noted that the installed base business came in at €2.8 billion, €300 million above expectations. He attributed the growth to software-driven upgrades that allow customers to boost productivity without machine downtime, enabling ASML to generate additional revenue from a tight supply of tools.
ASML raised its third-quarter guidance to €11-12 billion, significantly above its previous quarterly high. To achieve the full-year target, the company needs second-half revenue of €24.9 billion to €26.9 billion, representing 38% to 49% growth over the first half. Management is betting on higher upgrade revenue, increased output, and a better mix of EUV and immersion systems to drive gross margins to around 56% in the second half, up from 53.5% in the first half.
CEO Christophe Fouquet highlighted strong demand across all segments, with customers accelerating their capital spending plans. ASML now expects revenue from advanced foundry logic to rise about 25% this year, memory to grow 75%, and EUV business to increase roughly 45%. Key customers like Taiwan Semiconductor Manufacturing Co (TPE:2330) and Micron Technology Inc (NASDAQ:MU) continue to expand AI-focused output, underpinning demand for ASML's leading-edge lithography systems.
While the outlook is bullish, execution risks remain. ASML did not disclose a quarterly net-bookings figure, shifting focus to its order and capacity outlook. Fouquet said the company is nearing its 2027 EUV order target and expects to grow low-NA EUV capacity by around 30% that year, with many EUV orders already booked for 2028. However, analysts like Michael Roeg at Degroof Petercam questioned how ASML can add sufficient capacity to meet demand.
Supply-chain constraints, shipping delays, and export restrictions pose downside risks. China accounted for 14% of second-quarter system sales, down from 19% in the first quarter, but management still expects China to represent about 20% of full-year revenue. Proposed U.S. export rules could further impact sales. Investors are closely watching whether ASML can deliver on its ambitious third-quarter target of €11-12 billion, with around €2.9 billion expected from installed base sales and gross margins in the 55-57% range.
ASML shares rose 5.7% in early Amsterdam trading and are up about 69% year-to-date. The stock's valuation leaves little room for error, but the company's upgraded guidance underscores strong secular demand from the AI and semiconductor industries. The real test lies in turning that demand into revenue through flawless execution in the second half of 2026.
