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ASML (ASML) stock dipped as much as 5% on Wednesday as the chip equipment maker’s China segment shrank as a percentage of net system sales, but management pointed to strong sales momentum and raised its full year sales forecast amid AI-driven spending.
“Demand for chips is outpacing supply. In response, our customers are accelerating their capacity expansion plans for 2026 and beyond,” said CEO Christophe Fouquet in the company’s quarterly results release.
ASML raised its net sales forecast for this year to a range of €36 billion to €40 billion, equivalent to $42.46 billion to $47.18 billion. That’s up from a range of $40.12 billion and $46.02 billion.
The improved outlook was partially offset by second quarter guidance equivalent to $9.91 billion to $10.62 billion, which came in just below Wall Street expectations of roughly $10.70 billion, according to Bloomberg data.
The company’s China segment was also impacted by export bans on some of its most advanced machinery. Net system sales to China accounted for 19% in the first quarter of 2026, compared to 36% in the prior quarter.
Despite Wednesday’s drop, ASML shares are up 35% year-to-date, reflecting strong momentum across semiconductor stocks that have driven the broader market recovery in recent weeks.
Semiconductors have been a key driver of the rebound, with the S&P 500 (^GSPC) erasing all losses since the start of the Iran war and moving close to record highs.
The Philadelphia Semiconductor Index (^SOX) closed at a new record on Tuesday after posting its largest eight-day rally since 2002, as noted by BTIG strategist Jonathan Krinsky.
“Semis continue to shrug off any issues and while we are hesitant to chase them here, the trend and momentum must be respected until it stops,” Krinsky wrote earlier this week.
Analysts will pivot their focus to chip manufacturer Taiwan Semiconductor (TSM) which reports quarterly results on Thursday prior to the market open.
The company recently posted first quarter revenue which surged 35% year over year to a record 1.134 trillion New Taiwan dollars (about $35.6 billion), surpassing the high end of its own previous guidance.
Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on X at @ines_ferre.
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