ASML shares hit record high as AI demand fuels orders

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ASML has forecast bumper sales of its chip manufacturing equipment this year on the back of the AI boom, building on a blockbuster fourth quarter and sparking a rally across the tech sector on Wednesday.

The Dutch group’s stranglehold on the market for lithography equipment needed to produce cutting-edge chips has made it Europe’s most valuable company and a big winner from the surge in AI investment.

Chief executive Christophe Fouquet said the group expected a “significant increase” in sales of its Extreme Ultraviolet machines this year, after fourth-quarter orders smashed analysts’ expectations.

The industry powerhouse forecasts total net sales of between €34bn and €39bn this year, up from €32.7bn in 2025.

Shares in ASML rose 7 per cent to a record in Amsterdam, taking gains for the year to more than 20 per cent and driving the company’s market value to almost €500bn.

STMicroelectronics and Infineon were both up more than 6 per cent while futures for the tech-heavy Nasdaq 100 rose 0.8 per cent.

Fouquet said that customers had “a strong belief that the AI demand is real” and were starting to prepare for that with “a major addition of capacity” in the short term.

“This will start in 2026 and will last beyond that,” Fouquet added, driving a “huge appetite” for its latest technology.

It will include supplying equipment used in the manufacture of logic chips, such as Nvidia’s graphics processing units, which are made by Taiwan Semiconductor Manufacturing Company, as well as storage and memory chips. The latter are produced by companies including Micron, SK Hynix and Samsung.

ASML’s sales forecast implies revenue growth of as much as 19 per cent this year. That is well ahead of analysts’ forecasts of about 8 per cent to €35.3bn, according to consensus estimates from S&P Capital IQ.

Net bookings, a closely watched measure of orders, more than doubled in the fourth quarter to €13.2bn from the previous three-month period. That was almost twice the €6.9bn forecast by analysts.

ASML’s shares were boosted earlier this month after TSMC, one of its largest customers, said that it planned to sharply increase its chipmaking capacity in response to the AI surge.

TSMC’s chief financial officer Wendell Huang said it would be investing “significantly more” over the next three years than the $101bn in capital investment between 2023 and 2025.

Jensen Huang, chief executive of AI chipmaker Nvidia, told attendees at the World Economic Forum last week that the AI boom had “started the largest infrastructure build-out in human history”.

“We are a few hundred billion dollars into it,” he said in Davos. “There are trillions of dollars of infrastructure that need to be built out.”

ASML’s strong outlook comes despite a drop in revenues from China, which are expected to fall from nearly 50 per cent of sales in 2025 to about 20 per cent this year.

The US and Dutch authorities have placed limits on sales of ASML’s most advanced equipment to China, part of an effort to constrain Beijing’s ability to develop homegrown AI systems.

ASML said on Wednesday that it planned to make organisational changes including “streamlining” its technology and IT units, to “strengthen its focus on engineering and innovation”. That could result in up to 1,700 job losses, ASML said, or about 4 per cent of its staff.

The company also announced a 17 per cent increase in its dividend and a new €12bn share buyback programme.