Following the release of ASML Holding NV's (ASML) earnings, which far exceeded expectations, a clear consensus has emerged among mainstream Wall Street institutions: the company is at the dawn of a multi-year growth cycle, driven by AI computing infrastructure build-out and storage technology upgrades. The explosive growth in orders and robust performance guidance jointly confirm an inflection point in the semiconductor equipment industry's upcycle.

Financial results announced on January 28 revealed that ASML's fourth-quarter net bookings surged to a record high of €13.2 billion, nearly double the market's general expectation (approximately €6.6 to €7.0 billion). This data signals the semiconductor equipment industry has entered a powerful upward trajectory.

A landmark shift was also observed in the order structure. Orders for Extreme Ultraviolet (EUV) lithography systems contributed €7.4 billion, substantially surpassing forecasts; crucially, orders from memory chip customers accounted for 56% of the total, exceeding those from logic chip customers for the first time. This highlights that demand for high-performance memory, such as HBM and DDR5, is becoming the core driver of industry investment.

Concurrently, the company provided strong guidance for 2026, projecting a mid-point revenue of approximately €36.5 billion, representing year-over-year growth of about 12%. The current record backlog of €38.8 billion provides a high degree of certainty for performance delivery over the next two years.

In response to this series of better-than-expected data points, major Wall Street institutions have broadly raised their price targets. Among them, Citi and UBS set targets as high as €1,400, J.P. Morgan increased its target to €1,300, while Goldman Sachs maintained a target of €1,270.

The most critical highlight of the quarterly report was the new order intake. ASML's Q4 total bookings reached €13.2 billion, a figure that significantly surpassed market consensus, exceeding the expected range of approximately €6.6 to €6.9 billion (as per Visible Alpha) by 89% to 93.6%. It also substantially outpaced the most optimistic buy-side forecasts of around €8 billion.

Within this, orders for Extreme Ultraviolet (EUV) lithography systems contributed €7.4 billion, far exceeding the analyst consensus expectation of €4.4 billion. This indicates that customers are actively securing critical equipment capacity in advance for future advanced process nodes, including 2-nanometer and below technologies.

By the end of 2025, ASML's total backlog had climbed to a record €38.8 billion. This volume not only fully covers the company's full-year 2026 system sales expectations but also provides visibility extending into 2027, offering极强的 certainty for future performance.

The order data reveals a structural rotation within the semiconductor industry cycle. Memory chip customers accounted for 56% of Q4 orders, corresponding to approximately €7.4 billion, surpassing the 44% share from logic chip customers (around €5.8 billion) for the first time, establishing memory as the primary driver of current equipment investment.

UBS analysis noted that memory orders surged 71% year-over-year, primarily driven by two key trends: the critical transition in DRAM technology nodes from 6F² to 4F², and sustained demand growth for High Bandwidth Memory (HBM) and DDR5 fueled by AI applications. Customers are correspondingly increasing the number of EUV layers used in DRAM production.

Despite being overtaken in terms of percentage share, momentum in the logic chip segment remains robust. Both Citi and Goldman Sachs pointed out in their reports that logic chip customers are actively reassessing medium-term demand driven by artificial intelligence, consequently accelerating capacity planning and equipment investment, reflecting a clear recovery and expansion trajectory in this sub-segment.

Based on its substantial order backlog, ASML's management provided strong guidance for 2026 performance. The company expects full-year net sales to be between €34 billion and €39 billion. Using the mid-point of €36.5 billion, this implies approximately 12% year-over-year revenue growth, significantly higher than previous low single-digit growth expectations and exceeding the market consensus by about 3.5% to 4%.

Regarding profitability, management anticipates the 2026 gross margin will remain within the 51% to 53% range. From a product structure perspective, the EUV business is expected to see significant growth in 2026, while the Deep Ultraviolet (DUV) business is projected to remain stable.

In terms of regional revenue mix, management's guidance also reflects dynamic changes in global demand. The company expects the contribution percentage from certain regional markets to adjust over the coming year, a structural change already incorporated into the latest financial forecasts. This expectation sends a clear signal: the company is confident in demand growth from other global markets and believes it is sufficient to support the achievement of overall revenue targets.

Beyond the closely watched order data, ASML's quarterly financial performance and near-term outlook also remained solid. Fourth-quarter revenue reached €9.718 billion, slightly exceeding Citi's expectation of €9.643 billion and the market consensus of €9.586 billion. This figure included revenue recognition for two High-NA EUV systems.

The quarterly gross margin was 52.2%, modestly beating the market expectation of 52.0%. Earnings per share came in at €7.34. While this was slightly below some investment bank forecasts due to higher-than-expected R&D and SG&A investments, it remained within the company's own guidance range.

For the first quarter of 2026, the company provided an upbeat outlook: it expects revenue between €8.2 billion and €8.9 billion, with a mid-point of €8.55 billion, significantly higher than the prior market estimate of €7.95 billion. The gross margin is anticipated to remain stable within the 51% to 53% range.

Following their assessment of ASML's latest results, major investment banks reached a consensus: the company is at the starting point of a new technology upgrade cycle, and its current valuation does not yet fully reflect its growth potential for 2027-2028.

Citi maintained its "Buy" rating and €1,400 price target, arguing that market consensus for 2026 will be revised upwards, with upside potential for 2027-2028 being even more critical. The bank forecasts 2027 sales could reach €44 billion with EPS around €40, noting that the current forward P/E of about 30x remains below its five-year average.

J.P. Morgan assigned an "Overweight" rating with a €1,300 target, describing the order performance as a "blowout" and seeing almost no negative factors. It expects double-digit percentage upgrades to 2027 and 2028 earnings estimates.

Goldman Sachs maintained its "Buy" rating and €1,270 target, pointing out that the company's 2026 revenue guidance is about 5% above market consensus and that customer qualification for High-NA lithography systems is progressing smoothly.

UBS also gave a "Buy" rating with a €1,400 target, emphasizing that the adoption of High-NA technology will be the core growth driver in the next phase. The bank believes the company's current guidance remains conservative, leaving room for further upward revisions in the future.