Key points
- ASML beat its Q2 EPS estimate by about 11% ($8.82 actual versus $7.98 expected) and raised full-year 2026 guidance, citing AI-driven chip demand.
- Despite the beat and raise, ASML shares are up less than 1% today, a muted reaction for numbers this strong.
- ASML builds the lithography machines TSMC depends on to manufacture chips, so its results are one of the closest things the market gets to an early read on TSMC's own quarter.
- TSMC reports Q2 earnings before the bell tomorrow, July 16, and ASML's raised guidance points toward strong chipmaking demand heading into it.
Semiconductor earnings season opened a day early this week. ASML, the Dutch company that makes the machines used to print the world's most advanced chips, reported Wednesday morning, a full day before TSMC reports its own quarter. The numbers were strong. The stock's reaction was not, and that gap is worth paying attention to.
What ASML actually reported
ASML posted 9.3 billion euros in net sales for the quarter and a 54% gross margin, both ahead of its own guidance. Earnings per share came in at $8.82, about 11% above the $7.98 Wall Street was expecting. The standout was ASML's installed base business, the revenue it collects upgrading and servicing machines already sitting in customer factories, which came in about 300 million euros ahead of expectations.
Then came the guidance. ASML raised its outlook for the third quarter to 11 billion to 12 billion euros in sales with a gross margin of 55% to 57%. For the full year, it now expects 43 billion to 45 billion euros in sales, up from its prior range, with margin between 54% and 56%. Management pointed to AI demand as the driver. Broken down by business line: EUV lithography revenue growing about 45%, DUV metrology and inspection up around 25%, the combined upgrade and service business up more than 30%, and memory-related revenue up roughly 75%.
The stock barely moved
Given all that, you would expect ASML shares to be ripping today. They're not. As of this afternoon, ASML is up less than 1% from Tuesday's close. A company beating on every headline number and raising guidance twice in the same report should move more than that. It didn't, and there are a couple of honest explanations. One is that ASML has already run hard this year, so some of today's good news was priced in before the report even happened. The other is that the market may be waiting on confirmation from somewhere else before it gets more excited about the whole chip equipment and memory trade.
That somewhere else is TSMC, tomorrow morning
ASML builds the lithography machines that make advanced chip manufacturing possible in the first place. TSMC buys those machines and runs them to make chips for Nvidia, Apple, AMD and nearly everyone else in the industry. When ASML says AI demand is pushing its own numbers higher, that is effectively a preview of what TSMC's customers are ordering. We previewed TSMC's report here earlier today, and ASML's raised guidance lines up with the case for a strong TSMC print. TSMC has beaten its own EPS estimate for six straight quarters, and tomorrow's report would make it seven.
If the market really is waiting for TSMC before repricing the rest of the chip trade, tomorrow's report matters even more than usual. A strong number could be the confirmation that finally moves ASML too, along with the memory names, Micron included, that got hit hard in today's broader selloff.
What to watch tomorrow
Watch whether TSMC's own guidance echoes ASML's language on AI demand, especially anything about 2 nanometer capacity, since that is the piece of the story ASML's equipment sales can't tell on their own. And watch how ASML itself trades in the hours after TSMC reports. If ASML finally moves on someone else's earnings, that tells you the market wanted the TSMC confirmation more than it wanted ASML's own numbers.
Cover photo: ASML headquarters, Veldhoven. Bart van Overbeeke / ASML Brand Portal.
