ASML boosts European tech after strong outlook

That matters because ASML sits at the center of the global AI supply chain. Its lithography machines are essential for producing cutting-edge chips, so its order visibility is often treated as a read-through for demand from chipmakers, foundries and cloud groups investing in AI infrastructure. The company also said it expects 2026 sales of between €44 billion and €45 billion and a gross margin of about 56%, reinforcing the view that the investment wave in semiconductors has not yet peaked.

The market response was broader than a single stock move. European technology shares have been vulnerable as investors questioned whether AI spending can justify stretched valuations, especially with bond yields elevated and energy prices adding to inflation anxiety. ASML’s update helped counter that narrative for one session, lifting confidence in a sector that has been a key engine of the region’s equity gains this year.

Still, the rally was selective. Health-care stocks were the best performers, up 2.3% to their highest since Sept. 7, while miners lagged after JPMorgan cut its price target on Fresnillo. That split underscored how earnings season is separating companies with pricing power or durable demand from those exposed to commodity volatility or weak consumer conditions.

The earnings backdrop in Europe remains uneven. LVMH earlier in the week reported weaker-than-expected third-quarter sales as Chinese consumer sentiment deteriorated, a reminder that luxury and cyclical groups are still contending with fragile demand. By contrast, GSK gained 4.6% after announcing plans to cut up to 1,217 jobs in Belgium, highlighting how cost-cutting is being rewarded in a market that remains focused on margins.

Macro risks remain a constraint on any sustained move higher. Brent crude has hovered above $100 a barrel, keeping inflation concerns alive and feeding expectations that central banks may have to stay tighter for longer. Markets are pricing an 81% chance the European Central Bank will raise rates in December, while a stronger-than-expected U.S. inflation reading revived bets that the Federal Reserve may also stay hawkish later this month.

For investors, the key question is whether ASML’s results mark a durable bottom in semiconductor sentiment or just a short-lived relief rally. Technically, ASML was still below its 50-day moving average, while the SOXX semiconductor ETF also remained under pressure, suggesting the market has not fully repaired the recent selloff. But the fundamental message from ASML — that AI-related spending is still running ahead of current delivery cycles — gives bulls a fresh argument that the technology trade still has support, even if the broader European market continues to move unevenly between growth winners and macro losers.