ASML shares bounce as orders signal demand for AI equipment

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ASML, the chip manufacturing equipment maker, said orders for its most advanced machines surged last quarter, suggesting producers of artificial intelligence processors were increasing capacity before China’s DeepSeek this week triggered a panic over future demand.

Netherlands-based ASML lost its title as Europe’s most valuable tech company on Monday when it was caught up in a stock market panic over DeepSeek that also wiped hundreds of billions of dollars from the value of Nvidia, Broadcom and other chipmakers.

The low-cost techniques used by the Chinese company to create a breakthrough new AI model suggested that big advances could be made without the need for the vast investment in chips and computing power that US rivals such as OpenAI, Meta and Elon Musk’s xAI have planned.

DeepSeek’s focus on efficiency was in part caused by US-driven export controls that limit China’s access to ASML’s equipment and Nvidia’s most powerful chips.

However, Wednesday’s annual results from ASML pointed to strong demand for the equipment that chip manufacturers such as Taiwan Semiconductor Manufacturing Company, Intel and Samsung need to produce the most cutting-edge chips for customers such as Nvidia and Apple.

Shares in ASML jumped 11 per cent in early trading on Wednesday.

ASML said that its net bookings in the fourth quarter, which includes orders placed by customers but not yet delivered, hit €7.1bn, far higher than the €4bn analysts had expected, according to consensus estimates from Visible Alpha. Of that figure, orders for its “extreme ultraviolet lithography” (EUV) machines — its most advanced tools — made up €3bn, also well ahead of analysts’ forecasts.

Overall net sales for the fourth quarter grew 24 per cent to €9.3bn, while the group reported net income of €2.7bn, slightly ahead of estimates.

Strong demand for production capacity for AI chips was offsetting an otherwise lacklustre semiconductor market, ASML chief executive Christophe Fouquet said.

“The growth in artificial intelligence is the key driver for growth in our industry,” he said. “It has created a shift in the market dynamics that is not benefiting all of our customers equally, which creates both opportunities and risks as reflected in our 2025 revenue range.”

Despite forecasting first-quarter sales of €7.5bn-€8bn, also ahead of analyst estimates, ASML did not alter its earlier guidance that revenues for 2025 would be between €30bn and €35bn.

TSMC, ASML’s biggest customer, said this month that it planned to increase capital spending this year to between $38bn and $40bn, a more than 30 per cent rise, as it projected 45 per cent annual compound growth in AI chip revenue over the next five years.

Analysts at Stifel said in a note to clients on Wednesday that ASML’s rise in EUV bookings was “a positive surprise today, given the latest negative newsflow on Intel and Samsung”, who have been struggling to compete with TSMC on cutting-edge chip production.