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Wall Street Comments on ASML’s Earnings: Explosive Order Growth & Strong Guidance, Company at the Start of a New Technological Cycle!

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After ASML (NASDAQ: ASML) released an earnings report that far exceeded expectations, Wall Street institutions have reached a clear consensus: the company is at the beginning of a multi-year growth cycle driven by AI computing infrastructure and storage technology upgrades. The explosive growth in orders, combined with strong performance guidance, confirms that the semiconductor equipment industry has reached a turning point.

Earnings Report Highlights

ASML’s fourth-quarter earnings report, released on January 28, showed an explosive rise in new orders, which surged to €13.2 billion, setting a new all-time high. This figure was nearly double the market’s general expectation, which ranged from €6.6 billion to €7 billion. This data signals that the semiconductor equipment industry has entered a strong upward cycle.

The order structure also showed a significant shift. Extreme Ultraviolet (EUV) lithography machine orders contributed €7.4 billion, far surpassing expectations. Notably, orders from memory chip customers accounted for 56% of the total, for the first time exceeding logic chip orders, highlighting that high-performance memory demands, such as HBM and DDR5, are becoming the core investment drivers in the industry.

ASML also provided strong guidance for 2026, forecasting a revenue midpoint of €36.5 billion, representing a year-on-year growth of about 12%. The current order backlog of €38.8 billion provides high visibility and certainty for revenue over the next two years.

“Crushing” Expectations: €13.2 Billion Orders

The most critical highlight of the quarterly earnings was the surge in new orders. ASML’s reported €13.2 billion in new orders for the fourth quarter, significantly surpassing the market consensus, which was estimated between €6.6 billion and €6.9 billion. This was an 89% to 93.6% increase over market expectations and far exceeded the most optimistic prediction of around €8 billion.

EUV orders alone accounted for €7.4 billion, well above analysts’ expectation of €4.4 billion. This demonstrates that customers are actively securing key equipment capacity in advance for future advanced processes, including those at the 2nm and below nodes.

By the end of 2025, ASML’s backlog has surged to a historical high of €38.8 billion. This scale not only fully covers the company’s sales expectations for 2026 but also extends visibility to 2027, providing strong certainty for future earnings.

Structural Shift: Exploding Demand for Memory Chips

This order data reveals a structural shift in the semiconductor industry cycle. In the fourth quarter, memory chip customers accounted for 56% of the total orders, corresponding to approximately €7.4 billion, surpassing logic chip orders (44%) for the first time. This highlights the growing demand for high-bandwidth memory (HBM) and DDR5, which are becoming the primary drivers of investment in semiconductor equipment.

UBS analysts pointed out that memory orders grew by 71% year-on-year, driven by two key trends: one is the critical shift from 6F² to 4F² for DRAM nodes, and the other is the continuous demand increase for HBM and DDR5 driven by AI applications. Customers are increasingly adding EUV layers in DRAM production.

Although memory chips have now surpassed logic chips in order volume, the logic chip sector is still showing strong momentum. Citi and Goldman Sachs both noted that logic chip customers are actively reassessing mid-term AI-driven demand and accelerating their capacity planning and equipment investment, reflecting a clear recovery and expansion in this segment.

2026 Guidance: High Certainty in Growth

Based on its substantial order backlog, ASML management has provided strong guidance for 2026. The company expects net sales to range between €34 billion and €39 billion, with a midpoint of €36.5 billion, which represents a year-on-year growth of about 12%. This is significantly higher than the previously expected low single-digit growth and is approximately 3.5% to 4% above market consensus.

In terms of profitability, management expects a gross margin range of 51% to 53% in 2026. From a product structure perspective, EUV sales are expected to experience significant growth, while deep ultraviolet (DUV) lithography sales are expected to remain stable.

In terms of regional income, management’s guidance reflects dynamic global demand. The company expects some regional markets’ revenue contribution to decline in the next year, and this structural adjustment has already been incorporated into the latest financial forecasts. This signals that ASML has confidence in the growth of other global markets and believes they are sufficient to support its overall revenue target.

Q4 Revenue and Profit Steady, Q1 Outlook Positive

In addition to the highly anticipated order data, ASML’s quarterly financial performance and short-term outlook remained strong. The company reported revenue of €9.72 billion for the fourth quarter, slightly higher than Citi’s estimate of €9.64 billion and the market consensus of €9.59 billion. This included the revenue recognition from two High-NA (High Numerical Aperture) EUV systems.

The gross margin for the quarter was 52.2%, slightly exceeding the market expectation of 52.0%. Earnings per share (EPS) stood at €7.34, slightly lower than some analysts’ predictions, such as Citi’s expected €7.61, but still within the company’s own guidance range.

For the first quarter of 2026, the company has provided a positive outlook: expected revenue will range between €8.2 billion and €8.9 billion, with a midpoint of €8.55 billion, significantly higher than the market’s previous estimate of €7.95 billion. Gross margin is expected to remain stable at 51% to 53%.

Wall Street Consensus: Company at the Start of a New Growth Cycle, Huge Potential for 2027-2028

Following the release of ASML’s latest earnings, major investment banks have reached a consensus: the company is at the beginning of a new technological upgrade cycle, and its current valuation does not fully reflect its growth potential for 2027 and 2028.

Citi maintains a “Buy” rating and a target price of €1,400, believing that market expectations for 2026 will be revised upward, with the most significant upside potential for 2027 and 2028. Citi forecasts sales of €44 billion in 2027 and an EPS of around €40, noting that the current expected P/E ratio of around 30x is still below its five-year average.

JPMorgan has given a “Overweight” rating with a target price of €1,300, calling the order performance a “blowout,” and believes there are almost no negative factors to worry about. They expect double-digit upward revisions in market expectations for 2027 and 2028 earnings.

Goldman Sachs maintains a “Buy” rating with a target price of €1,270, noting that the 2026 revenue guidance is about 5% higher than the market consensus, and the certification progress for High-NA lithography systems is smooth.

UBS also maintains a “Buy” rating with a target price of €1,400, emphasizing that the adoption of High-NA technology will become the core growth driver for the next phase, and believes the company’s current guidance remains conservative, leaving room for further upward revisions.

Micron Announces Construction of New NAND Factory with $24 Billion Investment

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On Tuesday, Micron Technology (NASDAQ: MU) announced that it will invest an additional $24 billion in Singapore over the next decade to build a new NAND flash wafer fabrication plant, aiming to address the tight supply of storage chips driven by artificial intelligence. Micron’s stock price surged more than 5% in pre-market trading.

This new facility will be Singapore’s first dual-layer wafer plant, with a cleanroom area of 700,000 square feet. Wafer production is expected to begin in the second half of 2028. The project will create approximately 1,600 new jobs.

This move highlights the intensifying supply-demand imbalance in the global storage chip market. With the rapid expansion of AI infrastructure driving a surge in NAND demand, Micron, along with its South Korean competitors SK Hynix and Samsung Electronics, has shifted its production focus to high-end AI chips, leaving PC and smartphone manufacturers facing a shortage of storage chips.

Micron’s Large-Scale Expansion a Key Part of Global Capacity Strategy
Micron’s significant capacity expansion is a key component of its global production strategy. The company recently broke ground on a $100 billion facility in New York to alleviate what it calls “unprecedented supply shortages.”

AI Demand Drives NAND Price Surge
NAND flash, which serves as a replacement for hard disk drives, is in increasing demand due to its faster access speeds in AI infrastructure. These chips are typically sold in solid-state drive (SSD) form and can be directly plugged into a computer’s hard disk interface.

Counterpoint Research Director MS Hwang noted, “The importance of NAND in the AI field has grown significantly, and NAND prices have risen sharply. Suppliers are reducing their focus on traditional consumer markets, such as PC SSDs and mobile flash, while increasing their supply of enterprise-grade SSDs for data center servers.”

The global storage market is dominated by Micron and its two South Korean competitors. Since last year, the three companies have prioritized the production of high-end chips needed for AI infrastructure, diverting resources away from other segments of the storage chip market, leading PC and smartphone manufacturers to warn that storage chip shortages are impacting their businesses.

Global Capacity Expansion to Alleviate Supply Constraints
To ease supply constraints, Micron is significantly expanding its production capacity worldwide. In addition to the Singapore project, the company recently began construction on a $100 billion facility in New York.

Singapore is already one of Micron’s key NAND production bases. In early 2025, Micron announced plans to invest $7 billion in Singapore over the next few years to expand its manufacturing capabilities to meet the demand for advanced storage chips required for AI training. Micron has long relied on Singapore and Japan as critical production hubs.

The new wafer plant will work in tandem with the recently begun HBM advanced packaging facility, further solidifying Singapore’s crucial role in the global storage supply chain. Micron’s investment in Singapore aligns with the country’s strategic goals of advancing industries such as AI and cutting-edge chip manufacturing. The Singaporean government has already committed to investing over S$1 billion (US$786 million) to support local AI research.

Gold and Silver Hit Record Highs; Strong Corporate Earnings Boost Market Optimism

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Gold and silver continue to hit record highs, with precious metal stocks showing unstoppable momentum. In the previous trading session, Iamgold (IAG) and Pan American Silver (PAAS) both rose nearly 5%, while Newmont Mining (NEM) surged over 2% to a record high.

On Monday morning, spot gold surpassed the $5,000/oz mark for the first time in history, just over 100 days after it first broke the $4,000 threshold on October 8, 2025. Market analysts pointed out that central banks increasing gold purchases, geopolitical tensions, and economic uncertainties are key macro factors driving gold prices higher in recent years. Spot silver also reached new highs during early trading, surpassing $106/oz for the first time.

Wall Street institutions are generally bullish on the outlook for precious metals. Previously, JPMorgan projected that gold could reach $5,000 by Q4 2026 and even $6,000 in the long term. Citi raised its gold price target to $5,000 and silver to $100 in a bull-case scenario over the next 0–3 months. UBS expects silver to have about 25% upside from current levels, while cautioning that prices may experience a “roller-coaster” pattern within the year.

Q4 sales and net profit exceed expectations, Ericsson (ERIC) surged nearly 9% in the previous session

Last Friday, Ericsson released a strong Q4 2025 financial report. Q4 revenue fell 5% year-over-year to SEK 69.29 billion, still surpassing analysts’ expectations of SEK 66.65 billion; net profit attributable to shareholders reached SEK 8.56 billion, also exceeding the expected SEK 6.61 billion; gross margin rose from 44.9% to 47.2%.

Adjusted EBITA for Q4 reached SEK 12.7 billion, up 24% year-over-year, significantly above analysts’ prior estimate of SEK 10.5 billion. Moreover, the adjusted EBITA margin increased to 18.3%. Net profit in the quarter was particularly notable, rising from SEK 4.9 billion in Q4 2024 to SEK 8.6 billion, almost doubling; diluted EPS increased from SEK 1.44 to SEK 2.57.

In addition, Ericsson announced plans to propose a dividend of SEK 3 per share for 2025 and a SEK 15 billion share buyback program. Analysts had previously expected a dividend of SEK 3.76 per share. It is noteworthy that this marks the first time in Ericsson’s history that such a large-scale share buyback proposal has been made.

Key cancer therapy clinical data highlight competitiveness, Gilead Sciences (GILD) rose nearly 4% in the previous session, accumulating nearly 9% gain last week

On January 21, the New England Journal of Medicine (NEJM) published the full text of Gilead Sciences’ Phase 3 ASCENT-04 study on Trodelvy combined with Keytruda for first-line treatment of PD-L1+ metastatic triple-negative breast cancer. Data showed that the combination therapy reduced the risk of disease progression or death by 35%, with median progression-free survival (PFS) significantly extended to 11.2 months. This highly competitive clinical evidence has strengthened market confidence in Gilead’s oncology pipeline as a future growth driver.

At the JPMorgan Healthcare Conference on January 12, Gilead emphasized the long-term moat of its HIV pipeline. The market is highly optimistic about the upcoming large-scale commercialization of Yeztugo—a twice-yearly HIV prevention injection approved in 2025—expected in 2026. Additionally, the company’s single-tablet regimen (Bictegravir + Lenacapavir) is progressing smoothly in clinical trials, and the CEO highlighted that Gilead faces no significant patent expirations over the next decade. This high level of earnings certainty has attracted substantial defensive capital.

Since the start of January 2026, multiple Wall Street investment banks have actively raised Gilead’s price targets. UBS upgraded Gilead from “Neutral” to “Buy,” increasing its target from $112 to $145; BofA Securities and Morgan Stanley were even more aggressive, setting targets of $154 and $150, respectively; Citi also raised its target to $140.