Global AI rush helps ASML beat orders estimates, but China outlook dims

Core Insights - ASML expects to benefit from increasing investments in AI, despite anticipating a significant drop in Chinese demand next year [1][4] - The company's stock has surged 37% since early September, reflecting positive market sentiment [2] - ASML reported third-quarter net bookings of 5.40 billion euros, slightly above analysts' expectations [3] Company Performance - ASML's third-quarter net income was 2.12 billion euros, aligning with analyst forecasts [7] - The company is experiencing positive momentum in AI-related investments, particularly in advanced logic and memory chips [1][6] Market Dynamics - Chinese sales are projected to decline significantly after previously accounting for nearly half of ASML's sales in 2024 and a third in 2025 [4] - U.S.-led export restrictions prevent ASML from selling its most advanced tools in China, but the company does not expect short-term impacts from these restrictions [5] Future Outlook - Analysts believe that concerns regarding a worse-than-expected 2026 will diminish, with a focus shifting to potential growth in 2027 [6] - ASML's lithography tools are critical for major chip manufacturers, including TSMC, which produces most AI chips for Nvidia [6]