ASML Looks to Calm Fears Over 2026 Growth as It Warns of China Sales Decline

Dutch semiconductor equipment giant ASML :  moved to reassure investors about its 2026 outlook even as it warned of a “significant” drop in sales to China. The company — a cornerstone of the global chipmaking supply chain — continues to benefit from the ongoing AI boom, which supports robust orders and healthy profitability.

Guidance and market reaction

Crucially, ASML said it does not expect 2026 total net sales to be below 2025 and that it will present a more detailed outlook in January 2026. The reassurance addressed investor concerns after a July warning that the company could not confirm growth for 2026 due to geopolitical and macro uncertainties.

Following the update, ASML shares rose and were trading higher on the day of the announcement, reflecting restored investor confidence. The stock had already gained materially year-to-date as demand for advanced lithography tools surged with AI-driven chip investments.

Q3 2025 at a glance

•  Net Sales: €7.516 billion (vs. €7.79b expected)
• Net Profit: €2.125 billion (vs. €2.11b expected)
• Q4 sales guidance: €9.2 billion – €9.8 billion
• Expected Q4 gross margin: 51% – 53%
• Full-year sales growth guidance for 2025: ~15% vs. 2024

AI & partnerships: the long-term story

ASML’s long-term growth thesis rests on AI-driven expansion of chip production globally. The company has been deepening ties within the AI ecosystem — including a recent collaboration with French AI firm Mistral — positioning ASML closer to AI developers and cloud customers.

Moreover, significant semiconductor investments by major industry players (including partnerships and funding announcements from companies such as Nvidia and Intel) are expected to keep demand for lithography tools elevated over the medium term. Leading investment banks, including Morgan Stanley, UBS and Jefferies, have been positive on ASML’s strategic prospects in light of the AI build-out.

Conclusion

ASML’s latest update offers a balanced message: near-term headwinds from weaker China sales and geopolitical risks, but strong underlying demand from AI-related chip manufacturing and a durable technology roadmap. By confirming that 2026 sales should not fall below 2025 levels, management has given markets a degree of comfort — while making clear that 2026 may be a transition year as policymakers and customers adjust to the new export environment.

For investors and industry watchers, the most important takeaway is that ASML remains central to the semiconductor and AI hardware ecosystem. While China-related sales may ebb in the near term, the company’s technological leadership and exposure to AI-driven investment make it a strategic company to watch over the coming years.