ASML's solid results and improved guidance suggest that the stock is primed for solid gains following an impressive 2026.
ASML's solid results and improved guidance suggest that the stock is primed for solid gains following an impressive 2026.
The artificial intelligence (AI) hardware ecosystem has been rattled lately by high interest rates, concerns about the viability of heavy spending on AI infrastructure, potential challenges in accessing capital to fund the build-out, and rising competition from China. However, the latest results from arguably the most important company in the AI infrastructure ecosystem suggest that the fears may be overblown.
ASML Holding (ASML -0.96%) released its third-quarter results on Oct. 14. It not only delivered record results but also raised its full-year guidance. What's more, management's comments clearly suggest that the strong AI infrastructure spending environment isn't going away any time soon.
Let's take a closer look at ASML's results and check why it is a good idea to buy this semiconductor stock right now.
ASML's phenomenal growth is sustainable
ASML reported record revenue of 11.7 billion euros for the third quarter of 2026. That's an improvement of 56% from the year-ago period's revenue of 7.5 billion euros. Even better, ASML's gross margin increased to 57.5% last quarter from the prior-year period's reading of 51.6%. This robust jump in ASML's margins isn't surprising, as the company enjoys robust pricing power.
$1,641.52-$15.92 (-0.96%)
NASDAQ · As of 4:00 PM ET 10/16/26
After all, the Dutch company is the only manufacturer of extreme ultraviolet (EUV) lithography machines. These machines are used for printing advanced chips based on small process nodes, which are deployed in AI data centers to run training and inference workloads efficiently. Major foundries, such as TSMC and Intel, along with major memory manufacturers, deploy ASML's machines to produce cutting-edge chips.
The healthy improvement in ASML's margins, owing to its monopolistic position, explains why its earnings per share increased by a whopping 136% year over year to 12.95 euros per share. Importantly, ASML management's comments make it clear that the company can sustain such terrific growth rates.
Averytin News Financial update.