Driven by chip manufacturers increasing capital expenditures to expand production capacity for artificial intelligence (AI)-related chips, demand for ASML's (ASML.US) cutting-edge chipmaking equipment propelled the lithography giant to a fourth-quarter 2025 order value that far exceeded market expectations. Data revealed that ASML's Q4 order intake reached a historic record of 13.2 billion euros, significantly surpassing the average analyst estimate of 6.85 billion euros. The company noted that orders for its extreme ultraviolet (EUV) lithography machines amounted to 7.4 billion euros in the quarter, accounting for more than half of the total order value.

Simultaneously, financial results showed ASML's fourth-quarter sales reached 9.718 billion euros, a 29% increase year-over-year. Gross profit was 5.068 billion euros, up 31% compared to the prior year; the gross margin stood at 52.2%, versus 51.6% a year earlier. Net profit climbed to 2.840 billion euros, a 34% increase. Earnings per share were 7.35 euros, compared to 5.49 euros in the same period last year.

For the full year 2025, sales totaled 32.667 billion euros, marking a 16% annual increase. Gross profit was 17.258 billion euros, up 19% year-over-year; the full-year gross margin was 52.8%, improving from 51.3% in 2024. Net profit reached 9.609 billion euros, a 27% rise. Earnings per share for the year were 24.73 euros, up from 19.25 euros previously.

ASML also raised its performance guidance for 2026. The company now anticipates full-year 2026 sales to be in the range of 34 to 39 billion euros, with the midpoint of this forecast range higher than the average analyst expectation of 35 billion euros. The company had previously projected that 2026 sales would be flat compared to 2025. It also expects first-quarter 2026 sales to be between 8.2 and 8.9 billion euros.

Furthermore, ASML announced a new share repurchase program of up to 12 billion euros, which will be executed by December 31, 2028. The company also stated it would strengthen its investments in engineering and innovation by streamlining its technology and information technology departments, hinting at potential layoffs ahead.

ASML is the world's sole manufacturer of the advanced lithography machines essential for producing leading-edge chips, and its clientele includes all major chipmakers, such as Taiwan Semiconductor Manufacturing Company (TSM.US), Samsung, and Intel (INTC.US). These key customers are ramping up their investment plans in response to surging demand for AI chips and memory chips from cloud computing giants like Microsoft, Amazon, and Google.

Despite concerns about potential over-investment, the AI boom shows no signs of abating and recently helped propel ASML's market capitalization above the $500 billion mark this month. TSMC stated this month that it expects its 2026 capital expenditure to surge significantly to $52-56 billion, from $40.9 billion in 2025, with the majority allocated to advanced manufacturing technologies.

Last week, NVIDIA CEO Jensen Huang described the race to build data centers capable of supporting AI models as "the largest infrastructure buildout in human history." Huang also stated that "trillions of dollars" in additional investment would be needed in the coming years.

Additionally, as memory chip manufacturers expand their capacity, suppliers of chipmaking equipment, including ASML, are poised to benefit. ASML CEO Christophe Fouquet commented, "Over the past few months, the mid-term market outlook assessment from many of our customers has become significantly more positive, primarily based on stronger expectations for the sustainability of AI-related demand. This is reflected in their significantly increased mid-term capacity plans and our record order intake."

He added, "We expect 2026 to be another year of growth for ASML's business." ASML's order book is a key indicator of chipmakers' confidence in future AI demand. However, ASML stated that it will no longer disclose order intake data in future quarterly reports, as the company believes this metric does not accurately reflect business momentum.