The Dutch semiconductor equipment giant ASML released its third-quarter financial results on Wednesday, aiming to project cautious optimism for the coming year. The company stressed that although activity in China is expected to slow, it does not anticipate an overall decline in total revenue for 2026 compared to 2025, and it plans to present a more detailed outlook in January.

Third-Quarter Results: Stable Profitability Amid Slight Revenue Decline

ASML reported revenue of €7.516 billion in the third quarter, slightly below market expectations of €7.79 billion. Net profit reached €2.125 billion, nearly in line with forecasts. The company expects fourth-quarter revenue to range between €9.2 billion and €9.8 billion, with a gross margin of 51%–53%.

Compared to last year, ASML maintained an impressive growth pace — about 15% for 2025 versus 2024 — and a stable profitability rate of approximately 52%. The company’s stock rose 3% in recent trading and is up 24% year to date, supported by expectations for continued investment in semiconductors and artificial intelligence technologies.

Artificial Intelligence as a Key Growth Catalyst

According to CEO Christophe Fouquet, demand for advanced lithography systems is being driven directly by the expansion of AI technologies, which push clients to invest in additional manufacturing capacity. In the third quarter alone, ASML reported new system orders worth €5.4 billion. Fouquet emphasized that “AI is expected to add significant value to our products going forward and will remain a key component of our technology roadmap.”

Slowdown in China – Macro and U.S. Policy Effects

Despite the positive tone, ASML warned of a sharp drop in sales to China in 2026, due to ongoing U.S. export restrictions and escalating geopolitical tensions. In recent years, China has become one of ASML’s most important markets, but Washington’s regulatory measures — which restrict sales of advanced chipmaking equipment — continue to pose substantial challenges.

Future Trends and Semiconductor Industry Outlook

ASML, now Europe’s most valuable publicly listed company, continues to benefit from the strong momentum in the semiconductor industry and from expanding production by major chip manufacturers such as TSMC, Intel, and Nvidia. TSMC’s upcoming earnings report, scheduled for tomorrow, will be closely watched for signals about demand for ASML’s advanced lithography systems — particularly as computing infrastructure and AI chip production capacity remain strained.

In addition, ASML announced a new partnership with French AI firm Mistral, which the company says will help it get “closer to the AI world” and develop tailored solutions for the semiconductor industry.