ASML record bookings signal AI capex boom for chip equipment
Dutch lithography giant's €13.2B orders beat estimates by 109%, sending sector higher amid infrastructure buildout
ASML, the Dutch maker of semiconductor manufacturing equipment, reported record quarterly bookings of €13.2 billion on Wednesday, nearly double analyst expectations and signaling that chipmakers are accelerating capital expenditure to build artificial intelligence capacity.
The bookings figure for the fourth quarter of 2025 represents a 109% increase above consensus estimates, driven by exceptional demand for the company's extreme ultraviolet (EUV) lithography systems. EUV technology alone accounted for €7.4 billion of the quarterly order intake, reflecting sustained investment in advanced node manufacturing required for AI chip production.
The surge in demand has produced a book-to-bill ratio of 1.36 for the quarter, indicating that new orders significantly outpaced revenue of €9.7 billion. For the full year 2025, ASML achieved total net sales of €32.7 billion with net income of €9.6 billion, while ending the year with a backlog of €38.8 billion.
Customer sentiment has shifted markedly, according to ASML management. "Customers have expressed a notably more positive assessment of the medium-term market situation, primarily based on more robust expectations of the sustainability of AI-related demand," the company stated in its earnings release. This improved outlook has led to a "marked step-up in their medium-term capacity plans and in our record order intake."
The rally extended beyond ASML to the broader semiconductor equipment sector. Lam Research shares have climbed 33.4% year-to-date, while Applied Materials has gained 26.6% and KLA has appreciated 25.1%, with each reaching new highs following analyst upgrades in recent weeks. The semiconductor equipment index has outperformed the broader market as investors position for sustained AI infrastructure spending.
Analysts at major firms have responded by raising price targets on ASML and its peers. Morgan Stanley, UBS, and JPMorgan all increased their ASML targets in late January, with some expecting 2026 and 2027 earnings to be approximately 25% higher than current consensus estimates. The optimism reflects growing confidence that hyperscale technology companies will continue aggressive data center expansion.
Microsoft, Amazon, Google, and Meta are projected to invest $600-$700 billion in AI infrastructure in 2026, representing a 36% year-over-year increase. This spending wave is expected to drive global semiconductor equipment sales to $145 billion in 2026 and peak at $156 billion in 2027, according to industry forecasts.
ASML's guidance for 2026 anticipates total net sales between €34 billion and €39 billion, with gross margins maintained between 51% and 53%. The company expects 2026 to be "another growth year" driven by a significant increase in EUV sales, alongside contributions from two High NA EUV systems delivered in the fourth quarter.
The strength in equipment orders contrasts with broader semiconductor market volatility, suggesting that advanced manufacturing capacity specifically tied to AI workloads represents a durable growth driver. As the sole supplier of EUV lithography machines, ASML maintains a bottleneck position in the semiconductor supply chain, with competitors in other segments of the equipment market positioned to benefit from the same capacity expansion trend.