Two AI earnings reports that could move markets this week

Earnings season is accelerating. Roughly 10% of the S&P 500 is expected to report by the end of next week, with consensus pointing to another strong quarter — profit growth of around 14% year-on-year, which would mark the sixth consecutive quarter of double-digit expansion. 

But the gains are anything but evenly distributed. Technology is once again expected to lead, with earnings growth above 40%, powered largely by the AI investment cycle. Healthcare, by contrast, faces a contraction of around 10%. 

Before the sector heavyweights weigh in, traders will closely watch results from major U.S. banks — Goldman Sachs, JPMorgan Chase, Wells Fargo, and Citigroup — whose guidance on credit conditions and consumer spending will act as a real-time read on economic health. Against this backdrop, two semiconductor companies stand apart as the week’s most consequential earnings catalysts.

ASML – AI demand meets geopolitical headwinds

Date: 15/03/2026.

EPS Estimate: $7.79.

Revenue Estimate: $10.15B.

Share Performance in 2026: ~ +38%.

Last quarter

ASML delivered a standout result, with record bookings of €13.2 billion — more than double market expectations — signaling exceptional forward demand for its extreme ultraviolet lithography machines. Revenue came in at €9.7 billion, slightly ahead of consensus, while net profit of €2.84 billion missed estimates marginally. Strong results from key clients, including TSMC, reinforced the company’s central role in the AI infrastructure buildout.

Three things to focus on this quarter

1. Margin trajectory

Gross margins are expected to dip modestly this quarter, weighed down by an unfavourable product mix and softer servicing activity. The market is less concerned about the dip itself than about what comes after it.

ASML’s servicing and upgrade revenues tend to lag the installation cycle — machines sold during peak demand periods generate recurring revenue months or even years down the line. If management can signal that this decline is temporary and that margins are approaching a floor before recovering through 2026, the market is likely to take that positively. Any hedging or vagueness on that trajectory, however, will attract scrutiny. 

Given the stock’s premium valuation, investors need visibility into earnings quality, not just top-line growth.

2. China exposure and export restrictions

Export restrictions on advanced lithography equipment to China remain one of the most significant structural constraints on ASML’s growth. China has historically been one of its largest markets, but U.S.-led export controls — which the Dutch government has implemented under pressure from Washington — have progressively limited ASML’s ability to ship its most advanced EUV systems to Chinese chipmakers. 

The concern now is escalation. Any new measures announced alongside these results, or flagged as likely in upcoming guidance, could further shrink the addressable market. ASML has been rebalancing toward other regions, but that process takes time and cannot fully offset lost Chinese demand in the near term. 

Traders will want to know not just where China currently sits as a share of revenue, but how management expects that share to evolve over the next four to six quarters — and whether demand from the U.S., Europe, and South Korea can credibly fill the gap.

3. Valuation and order quality

ASML trades at a meaningful premium to the broader semiconductor equipment sector, a valuation that has been sustained by the extraordinary strength of its order book and the unique position it occupies as the sole manufacturer of EUV machines. That monopoly creates pricing power and visibility, but it also means the stock is sensitive to any signal that demand might be softening. 

The record bookings from last quarter set an exceptionally high bar. If this quarter’s order intake comes in below expectations (even if still strong in absolute terms) the market may interpret it as a sign that the peak of the AI capex wave is behind us. With limited margin for error, any disappointment in either orders or guidance risks an outsized price reaction. 

The quality of bookings matters too: orders from leading-edge logic customers carry more long-term margin potential than those from mature node or memory customers, so the composition of new orders could be as important as the headline figure.

Weekly ASML Chart – Source: TradingView

TSMC – The backbone of the AI supply chain

Date: 16/03/2026 pst market.

EPS Estimate: $3.34.

Revenue Estimate: $35.33B.

Share Performance in 2026: ~ +22%.

Last quarter

TSMC continued to demonstrate exceptional operational momentum, reporting a 35% year-on-year increase in net profit and record quarterly revenue exceeding NT$1 trillion — its eighth consecutive quarter of profit growth. High-performance computing, which encompasses AI workloads, accounted for the majority of revenue, while advanced nodes (7nm and below) represented a growing share of total wafer sales, supporting both pricing power and competitive moat.

Three things to monitor this quarter

1. Margin pressure from global expansion

TSMC is in the midst of its most ambitious geographic expansion in its history, building new fabrication plants in Arizona, Japan, and Germany. The goal is clear: diversifying production away from Taiwan reduces geopolitical concentration risk and puts capacity closer to key customers in the U.S. and Europe. 

But the financial costs are substantial. Overseas fabs are significantly more expensive to build and operate than equivalent facilities in Taiwan — partly due to higher labor costs, partly due to the loss of the deep supplier ecosystem that has developed around TSMC’s home base over decades. Early yield rates at new facilities also tend to run below mature Taiwan operations, which depresses margins in the near term. 

Investors will focus on how much of this margin dilution is already priced in, and whether management’s cost control efforts are keeping overseas ramp costs within the bounds of earlier guidance. Any upward revision to expansion costs — or downward revision to near-term margin targets — could weigh heavily on the stock.

2. Demand sustainability

AI has been an extraordinary demand driver for TSMC, but the durability of that demand is now one of the most debated questions in the semiconductor sector. The current cycle has been fueled largely by hyperscale cloud providers — Microsoft, Google, Amazon, Meta — racing to build out AI training and inference infrastructure. That buildout has been so rapid that some analysts have begun questioning whether it can continue at the same pace, or whether we are approaching a period of digestion where existing capacity is absorbed before new orders accelerate again. 

At the same time, the trend toward custom silicon is broadening the demand base. More companies — including newer AI-native firms — are designing their own chips rather than relying on off-the-shelf solutions, which means TSMC’s order book could be supported by a wider and more resilient set of customers than in previous cycles. 

Traders are likely to scrutinize management’s language around order visibility and any mention of lead times, which serve as a real-time indicator of how tight capacity remains.

3. Full-year guidance and market expectations

Perhaps the most important element of this earnings release will be TSMC’s forward guidance, both for the second quarter and the full year. Expectations have been set high by a combination of strong monthly revenue data and bullish commentary from customers earlier in the reporting cycle. 

In that environment, meeting consensus is not always enough — the market often needs a beat and a raise to sustain a premium multiple. If management offers guidance that is merely in line with current forecasts, some investors may interpret that as a signal of caution, even if the absolute numbers remain impressive. Conversely, any upward revision to the full-year outlook — particularly if accompanied by comments about sustained AI demand or accelerating advanced node utilization — would likely be received very positively. 

The tone and confidence of the CEO’s prepared remarks and Q&A will be parsed as carefully as the numbers themselves.

Weekly TSMC Chart – Source: TradingView

So, can the AI-driven growth narrative continue to justify elevated valuations in an environment still exposed to geopolitical risk, cost inflation, and the possibility that peak capex is closer than the market currently prices in? What do you think?