TMTB Morning News

Good morning. QQQs -11bps while Oil +1% is lightly higher. QQQs sit <2% from ATHs after a 12%+ ripper since the beginning of the month. On the Iran front, media outlets are talking about another face to face meeting within days and AP said “US, Iran agree in principle on extending Truce” while Trump said war is “close to over.” but so far not formal meetings have been scheduled.

Asia mainly green overnight: TPX +0.4%, NKY +0.44%, Hang Seng +0.29%, HSCEI +0.54%, SHCOMP +0.01%, Shenzhen -0.71%, Taiwan TAIEX +1.17%, Korea KOSPI +2.07%. Softbank +5%; Kioxia -7% on the Chinese supply news yesterday. Memory in the US lower as well with MU/SNDK/HDDs -2%. Software higher (+60bps) vs Semis (-70bps) early.

Let’s get to it…

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ASML -4%: Solid print but mixed guide has shares slightly lower

Q1:

• Revs came in at €8.8bn (down 10% QoQ, up 13% YoY), vs street of €8.7bn

• China sales declined to 19% of the mix, the lowest level since 1Q23.

• Gross Margin was at the high end of guidance at 53%, vs Street 52%, and Operating Margin solid at 36%, 140 bps ahead of street

• EBIT was €3.2bn, 4% above consensus of €3.0bn. EPS came in at €7.2, 7% above consensus of €6.7. FCF was -€2.6bn vs. consensus of -€0.6bn

• EUV unit volumes were 16 systems (+2 QoQ), bringing the full FY12/25 total to 48 units (+4 YoY). Management expects at least 60 units in 2026. Notably, ASML stopped disclosing order data starting this quarter.

Q2 Guide relatively weak:

• Sales guided to €8.4bn–€9.0bn (midpoint +13% YoY), roughly 3% below consensus of €8.95bn at the midpoint. Gross margin guided to 51%–52%, slightly below consensus of 52.3%. Implied EBIT is €2.9bn, about 4% below consensus of €3.1bn.

Full-Year Outlook Raised

ASML raised FY26 revenue guidance to €36bn–€40bn (midpoint +16% YoY), up from the prior range of €34bn–€39bn. Consensus sits at €37.7bn. Management expects strong growth for both EUV and non-EUV; DUV was previously expected to decline but is now seen as roughly flat. The raised guide accommodates potential outcomes from new export controls.

Call at 9am

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OpenAI: OpenAI unveils GPT-5.4-Cyber a week after rival’s announcement of AI model - Reuters

OpenAI, creator of popular chatbot ChatGPT, said that GPT-5.4-Cyber will initially be rolled ​out on a limited basis to vetted ​security vendors, organizations and researchers because of its more permissive ‌design.

The ⁠company is also expanding its Trusted Access for Cyber program to thousands of verified individual defenders and hundreds of teams protecting critical software, ​it said in ​a ⁠post on its website.

OpenAI is adding new tiers to its TAC program, ​which was launched in February, with ​higher levels ⁠of verification unlocking more powerful capabilities.

Users approved for the highest tier will gain access to GPT-5.4-Cyber, ⁠which ​has fewer restrictions on ​sensitive cybersecurity tasks such as vulnerability research and analysis.

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NET: Piper Upgrades to Overweight, $222 PT; AI Positioning + Platform Breadth Driving Upside