ASML, the Dutch semiconductor equipment giant, delivered a blockbuster earnings report on Wednesday, shattering order expectations and issuing bullish sales guidance for 2026, driven by sustained demand for artificial intelligence infrastructure.

The company reported fourth-quarter bookings of 13.2 billion euros ($15.8 billion), more than double analyst forecasts and a record high for the quarter, according to finance chief Roger Dassen. This surge in demand signals robust future revenue, as bookings represent future sales of its critical chipmaking machines.

ASML projected 2026 net sales to range between 34 billion and 39 billion euros, with the midpoint exceeding market expectations. The forecast indicates revenue growth of at least 20% compared to 2024, a notable improvement from prior uncertain commentary about the year. For the current quarter, the company expects sales of 8.2 billion to 8.9 billion euros.

Concurrently, ASML announced a significant restructuring, including layoffs resulting in a net reduction of approximately 1,700 positions, primarily in the Netherlands and the U.S., citing a need to improve organizational agility.

AI and Memory Shortages Drive Expansion
The stellar outlook is underpinned by multiple industry tailwinds. The AI boom continues to fuel massive investment in chipmaking capacity from key customers like Taiwan Semiconductor Manufacturing Co. (TSMC). Furthermore, a severe shortage of memory semiconductors is driving unprecedented price increases and prompting major producers like Samsung and SK Hynix to aggressively expand capacity, requiring more ASML equipment.

"We expect revenue from EUV machines to significantly go up in 2026," the company stated, referring to its most advanced lithography systems. CFO Dassen attributed customer optimism to a "more robust view" of sustainable AI demand, leading them to accelerate medium-term capacity expansion plans.

China Revenue Expected to Normalize
While AI drives growth elsewhere, ASML anticipates a normalization of its business in China due to export restrictions on advanced machinery. The company forecasts China will account for about 20% of total sales in 2026, down from 33% in the previous year, aligning with expectations of a significant year-over-year decline.

In a move to return capital to shareholders, ASML also unveiled a new 12-billion-euro share buyback program to be executed by the end of 2028.