ASML HoldingASML continues to dominate the lithography-based semiconductor equipment market and will deliver strong performance in the first quarter of 2026, driven by robust demand from AI-related infrastructure and advanced semiconductor nodes. The company reported total net sales of €8.77 billion for the first quarter of 2026, reflecting solid year-on-year growth of 13.3%.
Growth was supported by traction in logic and memory equipment, as these products are in high demand for inference, training, deployment, and model optimization needed for AI data centers and high-performance computing facilities. ASML’s system net sales for the first quarter of 2026 were €6.28 billion, with installed base management contributing €2.49 billion, highlighting the growing importance of ASML’s recurring revenue sources.
The installed base business continues to benefit from performance upgrades and increased utilization of EUV systems, strengthening our long-term revenue outlook, while driving net system sales across DUV technologies, including argon fluoride immersion, argon fluoride dry, krypton fluoride, mercury I-line and emerging EUV processes. Nowadays, AI processes require more complex chips, which calls for advanced ASML equipment.
ASML is able to charge a premium for its advanced lithography tools, ensuring solid profitability. In the first quarter of 2026, ASML’s gross margin improved to 53% and operating margin to 36%. Net income increased to €2.76 billion, accounting for 31.4% of total net sales. Regionally, demand remained strong across major semiconductor hubs, supported by aggressive capacity expansion plans by major chipmakers.
Another tailwind for ASML’s lithography systems is customers’ accelerated investment in logic and memory to meet growing chip demand around the world. ASML expects continued growth, with full-year 2026 net sales expected to be between €36 billion and €40 billion, and gross profit margins between 51% and 53%. The company expects sales in the second quarter of 2026 to be between €8.4 billion and €9.0 billion.
How competitors are fighting against ASML
ASML is a substantial leading player in its installed base lithography market, particularly in the EUV space. However, in the broader semiconductor equipment market, ASML competes with companies such as: ram researchLRCX and applied materialsAmat.
Lam Research is a long-established wafer manufacturing equipment manufacturer founded in the memory field. Lam Research’s memory division, which accounts for both dynamic random access memory and non-volatile memory, is gaining momentum thanks to AI.
Applied Materials supplies equipment used in chip manufacturing, including essential deposition and etch tools for both advanced and mature nodes. As AI and high-performance workloads make chips more complex, Applied Materials’ tools help design and manufacture efficient, compact node chips.
ASML Price Performance, Ratings and Quotes
ASML stock is up 38% year-to-date, with the Computer and Technology sector growing at 6.2%.
ASML YTD Performance Chart
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From a valuation perspective, ASML’s forward price-to-sales ratio of 12.16x is higher than the industry average of 6.49x.
ASML Forward 12 Months (P/S) Rating Chart
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ASML’s Zacks Consensus Estimates for 2026 and 2027 earnings imply year-over-year growth of 28.5% and 29.9%, respectively. The consensus forecast for fiscal 2026 has been revised upward in the past seven days.
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ASML currently carries a Zacks Rank #3 (Hold). You can view See the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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This article originally appeared on Zacks Investment Research (zacks.com).
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