Key Points
ASML’s Q1 earnings beat analysts’ expectations.
It raised its full-year revenue guidance and reaffrimed its gross margin outlook.
ASML (NASDAQ: ASML) posted its first-quarter earnings report on April 15. The Dutch semiconductor equipment maker's revenue increased 13% year over year to €8.77 billion ($10.38 billion), exceeding analysts' estimates by €110 million. Its earnings per share grew 19% to €7.15 ($8.46), beating the consensus forecast by €0.54.
For the full year, ASML expects revenue of €36 billion to €40 billion ($43 billion to $47 billion). That's up from its prior forecast of €34 billion to €39 billion and would represent 10% to 22% growth from 2025. It also aligns with analysts' expectations of 19% growth. It also reaffirmed its prior outlook for a full-year gross margin of 51%-53%, compared with 52.8% in 2025.
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ASML's guidance is encouraging, but it could also lift the entire Nasdaq, as it's a bellwether for the semiconductor and artificial intelligence (AI) markets. Let's see why it's one of the best AI chip stocks to buy, and what its rosy guidance tells us about the broader tech sector.
Why does ASML's outlook matter so much?
ASML is the world's largest producer of lithography systems, which are used to optically etch circuit patterns onto silicon wafers. It's also the only producer of high-end extreme ultraviolet (EUV) lithography systems, which are used to manufacture the world's smallest chips. These massive systems, which require multiple planes to ship, cost $200 million to $400 million.
All of the most advanced foundries -- including TSMC(NYSE: TSM), Samsung, and Intel -- use ASML's EUV systems to produce their top-tier chips. That makes it a linchpin of the global semiconductor market.
Top AI chipmakers like Nvidia and Broadcom, which outsource their manufacturing to TSMC, couldn't produce any chips without ASML. Therefore, ASML's confident guidance for the rest of the year indicates the AI boom isn't over -- and that ongoing expansion could drive the tech-heavy Nasdaq to fresh all-time highs this year.
ASML expects to keep growing through 2030
In its most recent investor day presentation in November 2024, ASML predicted its revenue would reach €44 billion to €60 billion ($52 billion to $71 billion) by 2030. That would represent a five-year CAGR of 6% to 13% from 2025.
The ongoing expansion of the AI market should drive that stable growth. Its newest high-NA EUV systems, which can produce even smaller chips than its current-gen low-NA systems, should further reinforce its dominance of the advanced lithography system market.
Simply put, ASML will remain one of the simplest ways to profit from the growth of the AI chip market without backing individual chipmakers. So if you expect the AI market to keep expanding, it's not too late to buy ASML's stock -- even though it isn't cheap at 39 times this year's earnings.
Should you buy stock in ASML right now?
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Leo Sun has positions in ASML. The Motley Fool has positions in and recommends ASML, Broadcom, Intel, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.
