ASML and Applied Materials (AMAT) delivered strong second-quarter results, providing further validation of the AI-driven growth story in the semiconductor industry. Both companies reported increased bookings and revenue, with management highlighting the growing demand for leading-edge logic, advanced packaging, memory, and process control.

ASML’s commitments have now extended into 2028, with most of next year’s production already reserved. This suggests that the company’s planned capacity ramp is being driven by real customer demand rather than speculative orders. Management also uses large down payments to calibrate true demand, giving confidence that build plans reflect genuine market needs.

AMAT was consistent with prior Q2/GIR takeaways but reinforced the constructive multi-year AI-driven WFE story. Management expects leading-edge logic, advanced packaging, and memory to account for around 80% of WFE in 2026, with revenue still expected to grow around 40% next year and strength continuing into 2027/28. The strongest areas remain advanced packaging, leading-edge foundry, and DRAM/HBM, while Process Control is expected to grow more than 50% in 2026 as customers focus on yield improvement, performance optimization, and materials engineering at advanced nodes.

AMAT highlighted solid execution, services growth, margin expansion, and internal AI productivity benefits, with regionalized semiconductor manufacturing adding a further tailwind to the high-margin services business. Capital allocation remains focused on small strategic deals and returning excess cash, as large M&A is seen as impractical in the current geopolitical environment.

Throughout the supply chain, AI demand is increasingly visible, with leading-edge logic, advanced packaging, memory, and process control all benefiting from stronger multi-year visibility. Leading chipmakers like TSMC also sounded confident that AI remains an early-stage, multi-year growth driver, with open-source models seen as a demand accelerator rather than a risk due to lower token costs broadening adoption across customers and their customers’ customers.

In conclusion, the strong Q2 results from ASML and AMAT reinforce the AI-driven growth story in the semiconductor industry. With increasing visibility into customer demand and growing confidence in the long-term potential of AI, investors can expect further tailwinds for these companies and the broader WFE ecosystem.