• ASML warns it may not achieve growth in 2026, citing geopolitical uncertainties.
• Second-quarter bookings rose to 5.54 billion euros, surpassing industry estimates.
• Shares dropped by up to 7.3% in early trading following the growth warning.
• Geopolitical factors and tariffs contribute to the overall uncertainty for the company.
• Strong demand from AI chipmakers offers some optimism among investors.

ASML, the world’s largest supplier of computer chip-making equipment, has issued a warning about the potential for flat growth in 2026, primarily due to ongoing geopolitical uncertainties. The company reported that despite surpassing analysts' expectations with second-quarter bookings of 5.54 billion euros ($6.4 billion), the outlook for the forthcoming years remains dim. Chief Executive Christophe Fouquet emphasized that "the level of uncertainty is increasing, mostly due to macroeconomic and geopolitical consideration," highlighting the role of tariffs in this scenario, according to Reuters and The Jakarta Post.

Analysts had anticipated that the positive quarterly results would reassure stakeholders regarding ASML's growth prospects. However, the company’s warning highlighted that if these challenges persist, 2026 would mark the first year without revenue growth for ASML in over a decade. CFO Roger Dassen noted the uncertainties surrounding tariffs were still unclear, indicating that ASML is actively working with its supply chain partners to mitigate any potential negative impacts, as reported by India Times and Reuters.

Despite the warnings, investor sentiment appears mixed. Han Dieperink, Chief Investment Officer at Aureus, indicated he was not overly concerned about the immediate future of ASML, as the current quarter reflected "solid demand." Analyst Michael Roeg from Degroof Petercam reiterated this viewpoint, highlighting the strong demand for AI-related chip products that could counteract some of the negative outlook. ASML's EUV lithography machines continue to be a significant factor in this demand, with applications in prominent technologies such as Nvidia's GPUs and Apple's devices, echoed by all sources including The Jakarta Post and India Times.

Furthermore, ASML is experiencing elevated demand from China, which accounted for 27% of its machine sales over the last three quarters. This indicates that while global uncertainties persist, specific market segments, particularly in less advanced machine sales, remain strong in anticipation of new U.S. export restrictions, according to Reuters and The Jakarta Post.