The most valuable European company, ASML, published its latest financial results at a critical moment, as recent volatility in memory stocks and growing investor concerns around AI monetization have cast doubt on the sustainability of the current cycle.
Against this backdrop, the company’s strong earnings in Q2 and, more importantly, upgraded outlook provide a clear counterpoint, suggesting that investment in AI infrastructure remains robust and far from peaking, writes eToro analyst for Romania, Bogdan Maioreanu.
ASML raised its full-year sales forecast for the second time this year while signaling further capacity expansion after AI-driven demand pushed second-quarter results above expectations. For investors, the key takeaway from the earnings report, besides the strong results, might be that the AI investment cycle remains firmly intact. As the near-monopoly provider of EUV lithography systems, the Dutch company ASML is directly leveraged to ongoing expansion in advanced semiconductor capacity. More telling than the quarterly beat is the planned capacity increase through at least 2028, signaling management’s confidence in sustained, structural demand rather than a temporary AI-driven spike. At the same time, rising gross margins confirm the company’s ability to translate strong revenue growth into improving profitability.
The company remains a key beneficiary of AI capital expenditures of the development of new chip manufacturing capabilities, supported by continued investment from major clients such as TSMC, Samsung, and Intel. In fact, Intel Foundry has become the first chipmaker to ship a high-volume logic product using High-NA EUV – high numerical aperture extreme ultraviolet lithography, a process that is an important next step in EUV lithography – marking a major milestone that puts it years ahead of TSMC, which does not expect to adopt the technology before 2029. For ASML, the transition of High-NA EUV technology into commercial production, marked by Intel’s initial deployment, reinforces confidence in the next generation of chipmaking tools. While adoption timelines may vary, it signals that the long-term growth trajectory remains intact.
Profitability is also improving, with gross margins expected to reach up to 56%, showing ASML’s ability to convert strong demand into earnings growth. However, near-term dynamics remain mixed: China’s declining contribution reduces exposure but underscores geopolitical risks, while the stock’s premium valuation suggests that investors should expect elevated volatility despite the robust long-term outlook.
ASML is Europe’s most valuable listed company, fueled by a strong recent rally, with shares up over 70% year-to-date versus roughly 8% for the STOXX Europe 600. This surge has pushed its forward P/E to 44.6, more than double the S&P 500’s, which is around 20, a demanding level even for a tech leader. Continued earnings upgrades could ease valuation pressures, but while long-term upside remains intact, the premium suggests higher short-term volatility. ASML is the 15th most held stock by investors globally on the trading and investing platform eToro at the end of the second quarter of 2026.
The key takeaway from ASML’s second quarter is not just the earnings beat, but the stronger outlook, raised guidance, continued capacity expansion through 2028, and higher margin expectations. This comes at a time when memory stocks are under pressure, and investors are questioning the pace of AI monetization, yet ASML’s outlook suggests the AI investment cycle remains intact, reinforcing its position as a core long-term beneficiary of global AI infrastructure spending.
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