ASML raised its earnings outlook for the second time this year amid strong demand for AI chip production. The Dutch semiconductor equipment maker anticipates full-year sales between €43 billion and €45 billion, with gross profit margins of 54% to 56%, significantly up from prior estimates of €36 billion to €40 billion in sales and 51% to 53% margins.
After this announcement, ASML’s stock surged over 7% at market open, continuing a 115% gain this year. In Q2, it reported net sales of €9.3 billion and net profit of €2.9 billion, surpassing expectations.
ASML, the only global producer of extreme ultraviolet (EUV) lithography equipment, noted strong order intake driven by customers’ capacity expansion plans. The CEO highlighted a targeted 30% increase in EUV and DUV capacities by 2026.
Despite these positive developments, ASML faces challenges like potential export restrictions on equipment to China, which could affect sales. Analysts remain concerned about sustainability in AI-driven capital spending in the semiconductor sector, with ASML trading at a high forward P/E ratio.
Overall, ASML expects about 20% of its total net sales to come from China, aligning with global market trends. It plans to update long-term goals at its Capital Markets Day in June 2024.
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