ASML Raises Full-Year Revenue Guidance Despite Margin Pressures from Production Scaling

ASML reported Q1 2026 sales of €8.8 billion and raised its full-year revenue guidance to €36–€40 billion, despite ongoing margin pressures. Its major customer, TSMC, reported impressive gross margins of 66.2%, as the 3nm node ramp-up accelerates margin accretion and now accounts for 34% of advanced node revenue. TSMC management issued upbeat guidance for Q2 sales growth of 8.6%–12% and expects full-year 2026 revenue growth to exceed 30%. Despite the strong fundamentals, TSMC shares saw muted price action, suggesting high expectations are already priced in at 30x earnings. However, DCF valuations still indicate a potential upside of up to 47%, supported by massive demand for N3 and N2 technologies. Ultimately, the expansion into advanced nodes underscores a sustained growth trajectory for the global semiconductor and AI sectors.