ASML Investors Press Executives on Outlook Despite Bookings Beat

Core Viewpoint - ASML Holding NV reported record orders in Q4 but faced skepticism from analysts regarding its ability to maintain momentum driven by artificial intelligence demand [1][2]. Group 1: Financial Performance - The company's bookings in Q4 reached €13.2 billion ($15.8 billion), significantly surpassing the average analyst estimate of €6.85 billion [2]. - Net income for Q4 was €2.84 billion, which fell short of estimates [5]. - Total net sales for 2025 were reported at €32.7 billion, with revenue guidance for the current year set between €34 billion and €39 billion, higher than previous forecasts [8]. Group 2: Market Dynamics - More than half of the last quarter's bookings were for EUV machines, totaling €7.4 billion, with each high NA EUV machine costing upwards of €350 million [8]. - The AI boom is expected to continue into 2026, with significant investments from companies like Meta Platforms Inc. and Microsoft Corp. driving demand for ASML's products [7][10]. - TSMC anticipates capital spending exceeding $52 billion in 2026, primarily for advanced manufacturing techniques, which will benefit ASML [7]. Group 3: Operational Challenges - Analysts expressed concerns about ASML's capacity to meet demand and the potential bottleneck in manufacturing its top-end tools [6]. - The company's ability to reach the high end of its revenue guidance depends on customers completing their chipmaking plants on time and ASML's capacity to ramp up production [3][4]. Group 4: Strategic Initiatives - ASML announced a new share buyback program of up to €12 billion through the end of 2028, representing about 2.5% of its current market capitalization [9]. - The company plans to cut approximately 1,700 jobs, or about 4% of its workforce, to streamline operations [5]. Group 5: Geographic Insights - China accounted for 36% of ASML's net system sales in Q4, but this is expected to decline to about 20% of revenue going forward [11]. - Due to US-led restrictions, ASML has been unable to sell its most advanced EUV machines to China, limiting its market potential in that region [12].