AI Mega Deals Boost ASML Outlook, Chip Market Rallies

ASML, the world’s leading semiconductor equipment maker, is poised for a strong third-quarter performance as multi-billion-dollar AI deals fuel optimism across the chip industry. Investors are closely watching whether major clients like TSMC, SK Hynix, and Intel will accelerate plans to expand production capacity, with potential ripple effects for 2026 and beyond.

ASML shares have surged 32% since early September, significantly outperforming the Philadelphia Semiconductor Index, which rose 15% in the same period. The rally comes amid heightened expectations that AI-driven demand for datacenters will translate into bigger orders for ASML’s lithography machines—critical tools for manufacturing advanced chips.

Strong Bookings Signal Growing Demand

Analysts predict ASML’s third-quarter new bookings could reach €5.36 billion ($6.21 billion), adding to a first-half total of €9.48 billion. Net income is expected to rise modestly to €2.11 billion, reflecting steady performance despite earlier uncertainty over 2026 growth.

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Recent deals from tech giants including Meta and Oracle with chip suppliers like NVIDIA, AMD, Intel, and Samsung indicate expanding production needs, positioning ASML at the heart of the AI boom.

Challenges in Scaling Chip Production

Expanding chipmaking capacity is not instantaneous. Each ASML machine costs upwards of $300 million and has a delivery lead time of 8–12 months. Chipmakers face the delicate task of balancing early orders against the risk of delayed delivery, a challenge highlighted during the COVID-19 pandemic when ASML struggled to meet surging demand.

With top client TSMC ramping up purchases and Intel’s outlook improving, the industry anticipates a gradual yet meaningful expansion of AI-focused chip production over the next few years.