ASML's second quarter arrived at the moment the AI buildout stopped being a question of demand and started being a question of how much advanced lithography the world's chipmakers can actually get their hands on. Total net sales of about $10.7 billion (EUR 9.3 billion) were up roughly 21% year over year and above the high end of management's prior guidance, and the company raised full-year 2026 net sales to a new range of about $49.5–$51.8 billion (EUR 43–45 billion) from a prior range of $34.5–$40.3 billion (EUR 30–35 billion). That is the kind of revision that resets the multiple: a single quarter of demand so far above capacity that the company is planning to add 30% to its 2026 EUV capacity of about 65 systems for 2027 and is investigating another 30% for 2028. The bottleneck is real, the customer commitments are real, and the order book is what is doing the work - not pricing, not mix, but volume that the equipment industry cannot accelerate fast enough.
The earnings line told the same story. Gross margin reached 54.0% in the quarter, up from 53.7% a year ago, and operating margin of 37.1% was 250 basis points higher than Q2 2025's 34.6%. Net income of about $3.3 billion (EUR 2.9 billion) translated to basic EPS of about $8.75 (EUR 7.59), up roughly 29% from $6.80 (EUR 5.90) a year ago. The lift came from above-guidance Installed Base Management (IBM) sales - the service-and-field-option business that grows with the installed base - and a more favorable mix toward High NA EUV and advanced immersion systems. Installed base economics are the durable part of the ASML story that the market often under-weights, and the quarter showed it working at scale: H1 2026 IBM sales of about $6.0 billion (EUR 5.2 billion) were up 28% year over year.
The trade is the trade. At a reference price of $1,847.90 (Nasdaq close, August 13, 2026), ASML trades at roughly 17x trailing sales, around 45x trailing earnings, and about 48x forward earnings on the company's own raised revenue range. The market is paying for the next two to three years of capacity expansion, not for 2026 alone, and management's own commentary - concrete customer commitments, two consecutive 30% capacity steps, and a full raise of full-year guidance by roughly $11.5 billion (EUR 10 billion) at the midpoint - is what is doing the work of justifying that price. The risk is no longer cyclical demand. It is execution: whether ASML can actually build and ship the next 30% of EUV capacity on a 12-month cadence, whether the High NA EUV ramp produces the throughput economics the customer base is committing to, and whether the Chinese demand deceleration visible in the geographic mix is the start of a deeper pullback or just normalization after several years of pull-forward.