Dutch technology giant and Europe's largest company by market cap, ASML, reported on Wednesday another strong quarterly result and raised its sales forecasts on thriving demand for AI systems.
ASML is a critical cog in the global economy and a key bellwether for the tech sector, as everything from smartphones to missiles relies on the semiconductors crafted with its tools.
Investors were watching the results especially closely after several sharp sell-offs in the tech sector over fears the AI bubble might be approaching its bursting point.
But the firm's chief executive officer, Christophe Fouquet, said AI was still pushing his business forward.
"Ongoing AI-related investments and continued progress in AI technologies are driving demand for advanced Logic and Memory chips, further strengthening the semiconductor industry's growth outlook," said Fouquet in a statement.
"Our order intake remained extremely strong in the first half of the year," added the CEO.
The firm, Europe's biggest by market capitalization, said it now expected to make between 43 billion and 45 billion euros ($49 billion-$51 billion) in total net sales this year.
This was an increase from the range of 36-40 billion euros that ASML had previously forecast and was due to "a continuous, very strong demand from our customers," said Fouquet.
Net profits were also better than expected for the second quarter, coming in at 2.9 billion euros compared to the 2.3 billion euros the firm made in the same period last year.
"All in all, I would say a very strong quarter. Both from a market dynamic perspective and from an execution perspective," said chief financial officer Roger Dassen.
Stock market players agreed, pushing the stock up by nearly 8% at the opening bell of the Amsterdam trading session.
Boosted by ASML, the AEX index soared above 1,100 points for the first time.
ASML said it expects net sales of between 11 billion and 12 billion euros for the third quarter of the year.
Its second-quarter net sales came in at a better-than-forecast 9.3 billion euros, compared with 7.7 billion euros in the same three months of last year.
Based on the strong momentum, Fouquet said the firm planned to increase capacity by 30% for two of its key chipmaking machines, with another 30% boost possible in 2028.
The company, however, has been caught in the crossfire of a tech spat between the U.S. and China and has previously warned its Chinese sales would "decline significantly" this year.
Dassen said ASML expected China to represent around 20% of its sales in 2026.
"You could say that the Chinese market is moving in sync with the overall behavior that we see globally," said Dassen.
Washington is leading efforts to curb high-tech exports to China over fears they could be used to bolster the country's military.
Beijing has reacted furiously to the measures, describing them as "technological terrorism."
Last month, ASML denied reports of U.S. concerns that one of its advanced chipmaking machines was in China, potentially violating the restrictions.
In January, ASML announced a shake-up in its organization that was expected to result in the loss of around 1,700 jobs in the Netherlands and the U.S., mainly from leadership roles.
The firm employs roughly 44,000 staff worldwide.
