ASML has successfully entered the noble market capitalization club with its exclusive $500 billion. The company on Thursday crossed the $500 billion in market value and reached this milestone after TSMC, which is its biggest customer, announced that it plans on spending more than expected in order to cope with the extreme demand for AI chips.
Investors usually notice when a company’s customers start to spend a good amount of money, and ASML’s stock surely did that.
TSMC’s Spending Spree Sends a Clear Signal
TSMC disclosed that it will spend from $52 billion to $56 billion for capital expenditures in 2026, which is a huge increase over the approximately $46 billion that the analysts had estimated. The surprise upgrade means more factories, more tools, and most importantly for ASML there will be more advanced chip production equipment.
The market has already started to connect the dots with 21% more capital flowing in the probable chipmaking equipment purchases.
On that day, ASML stocks went up by 5.4%, which marked the end of an astonishing 24% rally in January alone. This increase has now decisively secured ASML the position of the most valuable company in Europe. This is a title it quite comfortably holds, as the demand for AI is constantly increasing, and ultimately resulting in modified expectations.
AI Boom Has a Favorite Supplier
ASML’s growth is not solely dependent on one customer’s spending plans. The company is situated at the very heart of the global semiconductor supply chain, and it is the provider of the highly specialized tools that are required to produce chips of the highest quality.
The demand for AI is so great that the manufacturers of chips from Samsung and SK Hynix to Micron are all rushing to increase their capacity. When they expand, they reach out to ASML.
Industry analysts believe that the market has constantly misjudged the speed and the extent of demand driven by AI. As per Han Dieperink from Aureus, the use of AI is unfolding faster than anticipated and this creates some bumps, specifically in the AI memory area, which in turn is compelling manufacturers to make more investments at an accelerated pace.
“The market has underestimated again how large is the demand for AI, and the implementation is going faster than everybody expected”.
For ASML, the urgency is simply reflected in their order books.
The Outlook is Improving
Even though the stock has had a fantastic run, ASML has kept a very cautious approach in terms of its future. The firm has already mentioned that the growth in 2026 might be one with less or no growth, mainly because building new plants is a time-consuming process and getting permits is not very quick. In other words, the demand is extremely high and is running, but the manufacturing activities are gradually moving along.
However, TSMC’s latest budgeting plans could do a lot in changing the medium-term scenario. Citi analysts believe that ASML’s 2027 and later forecast is now getting better as TSMC is planning to speed up its factory production. This might lead to a shift from today’s cautious optimism to tomorrow’s strong growth narrative.
Bottom Line
The crossing of $500 billion by ASML is not only a milestone, but it also reminds us of the main beneficiary of the AI gold rush. The scenario is such that while chipmakers are contending for market share, and manufacturers are racing to build their capacity, ASML is the one selling the essential tools for all.
With TSMC and other companies increasing their investments, ASML’s long-term growth story seems quite firm. The good thing about the current AI period is that the best seller is still the one, from whom without that particular chipmaker the chips cannot be made.
