The Dutch semiconductor equipment giant ASML has delivered a fourth-quarter performance that didn’t merely meet expectations but shattered them. Fueled by insatiable demand for chips powering artificial intelligence, the company’s new order intake came in at nearly double what market experts had forecast. Despite this record-setting pace, management is not standing still, announcing a significant share buyback program and a strategic workforce restructuring.
Strategic Shift and Capital Return
Alongside its stellar results, ASML is initiating a corporate transformation aimed at boosting efficiency. The company plans to reduce its workforce by approximately 1,700 positions, primarily within administrative functions. Concurrently, it intends to increase hiring for engineering roles. This move underscores a sharpened focus on technological innovation and coincides with a strategic reduction in reliance on the Chinese market. Management anticipates that by 2026, China will contribute only about 20% of total sales, a notable decrease from roughly 33% the previous year.
Shareholders are set to benefit directly from the company’s strong financial position through enhanced capital returns:
* Share Repurchase: A new program authorizing buybacks of up to €12 billion will run through the end of 2028.
* Dividend Increase: The dividend for 2025 is being raised by 17% to €7.50 per share.
Unprecedented Order Surge
The core of the positive surprise was the monumental level of new bookings. Fourth-quarter net new orders reached €13.2 billion, dramatically surpassing the €6.3 billion consensus estimate. A substantial €7.4 billion of this total was for the company’s most advanced extreme ultraviolet (EUV) lithography systems.
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This surge in demand highlights the aggressive capacity expansion underway at chipmakers worldwide, all striving to meet the computational requirements of AI development. As the undisputed technology leader in lithography, ASML is a direct beneficiary of this investment cycle. This dynamic is reflected in the company’s share price, which has advanced more than 97% over a 12-month period.
Confident Long-Term Outlook
The company’s forward guidance reinforces a confident stance. For the full year 2026, ASML provided a revenue outlook ranging between €34 billion and €39 billion. The midpoint of this forecast exceeds previous consensus estimates from analysts.
ASML enters the new year with powerful momentum and a record order backlog of nearly €39 billion. Further details on the company’s long-term strategy are expected with the publication of its annual report on February 25.
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