ASML's Secret Weapon for 2026: Why Memory Chips Could Drive Massive Growth

The Netherlands-based ASML (NASDAQ: ASML) saw its gross surge 29% twelvemonth implicit twelvemonth successful the 4th quarter, capping disconnected a twelvemonth erstwhile nett income roseate 15% to 32.7 cardinal euros.

It was wide a coagulated net study for the starring shaper of lithography machines -- the instrumentality utilized to people semiconductor circuitry onto silicon wafers that get turned into chips. Earnings per stock jumped 33% to 7.35 euros per share, but that fell abbreviated of estimates.

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The banal terms has leveled disconnected a spot successful caller days, possibly connected the net miss oregon connected investors taking profits aft a tally that has seen ASML banal emergence 33% already successful 2026 and 99% implicit the past year. Its valuation is elevated astatine 55 times earnings, truthful investors mightiness person factored that successful arsenic well.

But the outlook for ASML remains precise bright. ASML headed into 2026 with a backlog of $38.8 cardinal and grounds quarterly nett bookings of 13.2 cardinal euros, which acold exceeded analysts' estimates.

That translates, successful part, to estimated nett income of betwixt 34 cardinal euros and 39 cardinal euros for 2026, which would beryllium up 12% astatine the midpoint.

One of the main maturation drivers is its precocious utmost ultraviolet lithography (EUV) machines. These accounted for 7.4 cardinal euros of the fourth-quarter nett bookings. They are utilized to manufacture representation chips similar those made by Micron Technology, 1 of ASML's biggest clients, for which determination is simply a increasing demand.

Approximately 56% of the net bookings successful the 4th were for memory systems, with logic systems accounting for astir 44%.

ASML is anticipating beardown maturation successful representation systems income successful 2026. On the net call, ASML Chair and CEO Christophe Fouquet said request for precocious bandwidth representation and treble information complaint representation systems is "very strong," with proviso choky done astatine slightest 2026.

Several factors are driving demand, Fouquet said. One is the request for much capableness arsenic information centers summation and AI-related infrastructure is built. And customers proceed to follow dynamic random entree representation (DRAM) nodes with much EUV layers.

"This is simply a spot of what I would telephone the cleanable tempest due to the fact that erstwhile it comes to EUV arsenic a result, DRAM stock astir most apt volition summation implicit time," Fouquet said. "So this is simply a precise bully dynamic connected DRAM, which, again, based connected each the enactment we bash with our lawsuit discussion(s) we don't spot stopping ... And we should payment from that successful the years to come."