Chipmaking supplier ASML set to ride AI megadeals wave

ASML's upcoming third-quarter earnings are expected to reflect a significantly strengthened outlook, driven by multi-billion dollar AI deals between tech firms and chipmakers, which are prompting customers like TSMC and SK Hynix to accelerate capacity expansion plans for 2026 and beyond. This shift in sentiment, from earlier uncertainty, has already propelled ASML shares up 32% since September 2. Analysts forecast Q3 new bookings at 5.36 billion euros and a 1.4% increase in net income to 2.11 billion euros, underscoring robust demand for ASML's critical chipmaking tools fueled by anticipated massive datacenter expansion for AI.

Analysis

ASML's third-quarter earnings are anticipated to reflect a significantly strengthened outlook, primarily driven by multi-billion dollar AI deals between technology firms and chipmakers, prompting key customers like TSMC and SK Hynix to accelerate capacity expansion plans for 2026 and beyond. This positive sentiment has propelled ASML shares up 32% since September 2, substantially outperforming the Philadelphia Semiconductor Index's 15% rise over the same period.

Analysts forecast Q3 new bookings at 5.36 billion euros, following 9.48 billion euros in the first half, alongside a projected 1.4% increase in net income to 2.11 billion euros. This marks a notable shift from management's earlier uncertainty in July regarding 2026 revenue growth, now underpinned by AI megadeals from companies such as Meta and Oracle, which are fueling demand for ASML's essential chipmaking tools.

The strategic importance of ASML's equipment, costing over $300 million apiece with 8-12 month lead times, positions it critically for the impending datacenter expansion. While top customers like TSMC are expected to increase purchases, analysts seek clarity from ASML management on the extent to which customers can accelerate plant construction, despite ASML's ongoing efforts to expand its own capacity.

Key Decisions for Investors

• Monitor ASML's Q3 earnings report for confirmation of the strong bookings forecast and any updated 2026 guidance, particularly regarding customer capacity acceleration.
• Evaluate the long-term implications of AI-driven datacenter expansion on ASML's order backlog and production capacity, considering the extended lead times for its critical equipment.
• Assess management commentary for insights into the sustainability of current demand trends and any potential bottlenecks in the chip manufacturing supply chain.