ASML’s Ai Gold Rush Continues But Wall Street Has One ConcernASML Holding NV Sponsored ADRBATS:ASMLmoonyptoASML delivered a strong second quarter, with revenue climbing 21% year over year to €9.3 billion, beating expectations by €400 million. GAAP EPS increased 29% to €7.59, coming in €0.60 above estimates. Gross margin reached 54%, helped by strong sales from its high margin Installed Base Management business. The company generated €1.3 billion in free cash flow and bought back €1.1 billion worth of shares. ASML stock is now up nearly 70% this year The biggest takeaway was ASML raising its 2026 outlook for the second time this year while outlining major capacity expansion plans. The company now expects 2026 revenue of €43 billion to €45 billion, up from its previous forecast of €36 billion to €40 billion and above the market estimate of around €39 billion It also raised its gross margin target to 54% to 56% from 51% to 53%, while third quarter revenue guidance was increased to €11 billion to €12 billion ASML is preparing for continued demand growth driven by AI infrastructure spending. The company expects LowNA EUV capacity to increase by around 30% in 2027 to approximately 85 systems, followed by another 30% increase in 2028 to around 110 systems. DUV immersion capacity is also expected to grow by roughly 30% annually over the next two years The AI boom continues to benefit ASML as chipmakers expand production of advanced nodes. Advanced logic revenue is expected to grow about 25% this year, while memory revenue could jump around 75%. Customers are increasing capacity across 5nm, 4nm, 3nm, and 2nm processes, while already preparing for future 1.4nm technology Intel Foundry has started production of its Intel 18A process using ASML’s most advanced High NA EUV equipment. Meanwhile, TSMC has indicated it plans to delay High NA adoption until 2029. ASML CFO Roger Dassen also suggested the company may have more pricing power for LowNA tools due to current market conditions, highlighting ongoing discussions with major customers like TSMC.. China’s contribution to system sales continued to decline, falling to 14% from 19% in Q1, putting it below ASML’s full year expectation of around 20% ASML will provide a broader long term update during its Capital Markets Day on June 10, 2027. Investors will be watching whether the company can turn strong AI driven demand into higher equipment prices and expanding margins, or whether customer pushback, particularly from TSMC, limits how much of this growth reaches ASML’s bottom line We’re already up 77% since our last analysis, so now the real question is.. do you take the money and run or sit tight and DCA like a true AI believer waiting for the next dip?