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Finance - July 17, 2025

ASML Faces Uncertainty in 2026 Growth Prospects: Shares Drop 6.5% Amidst Chip Industry Giant’s Cautious Outlook

ASML Faces Uncertainty in 2026 Growth Prospects: Shares Drop 6.5% Amidst Chip Industry Giant’s Cautious Outlook

In a cautionary statement on Wednesday, ASML, a leading global provider of photolithography systems for the semiconductor industry, announced potential stagnation in revenue growth for 2026, despite surpassing expectations in their second-quarter financial results.

For the current quarter, ASML’s guidance fell short of market expectations, narrowing its own forecast for the remainder of the year. The Dutch tech giant’s shares experienced a decline of 6.5% shortly after European markets opened.

The company anticipates third-quarter revenue between €7.4 billion and €7.9 billion, falling short of the predicted €8.3 billion. ASML expects full-year net sales growth of approximately 15% for 2025, narrowing its initial guidance range of €30–€35 billion. This projected growth would equate to a revenue of €32.5 billion for 2025.

However, ASML expressed uncertainty about the outlook for 2026 due to ongoing macro-economic and geopolitical uncertainties. In a statement, CEO Christophe Fouquet stated, “Our AI customers’ fundamentals remain strong; however, we continue to encounter increasing uncertainty driven by macro-economic and geopolitical developments. While we still prepare for growth in 2026, we cannot confirm it at this stage.”

Despite these concerns, ASML outperformed analyst estimates in all key financial indicators for the second quarter, including both top and bottom lines and net bookings. The company’s revenue from upgrading currently deployed machines and a less negative impact of tariffs than anticipated contributed to this strong performance.

ASML is one of the most significant companies in the semiconductor supply chain, manufacturing extreme ultraviolet lithography (EUV) machines. These machines are essential for producing the world’s most advanced chips, such as those designed by Apple and Nvidia. Major clients include Intel and Taiwan Semiconductor Manufacturing Co.

ASML has benefited from demand related to chips required for artificial intelligence, with this AI demand acting as “a big driver for EUV.” The company recently released its next-generation EUV tools known as High NA, which are key to ASML’s future growth plans. These machines, which are larger than a double-decker bus and can cost over $400 million each, were shipped by the company in the second quarter.