European Tech Posts Record 16% Earnings Growth on AI Surge

• AI spending drives 16% EPS growth in Europe's tech sector.
• Chipmakers and cloud firms dominate earnings momentum.

European technology companies significantly outperformed earnings expectations for the third quarter of 2025, driven by surging global investments in artificial intelligence infrastructure. On October 27, 2025, Bloomberg reported European tech firms posted a 16% EPS growth for Q3, far surpassing the forecasted 4.2%, as AI investments fuel unprecedented demand. This sharp rise reflects increasing demand for chips, software, and cloud capacity foundational to AI applications.

ASML Holding NV, a leading Dutch chip-equipment manufacturer, played a major role in this performance surge. ASML reported strong orders for its most advanced machines, alleviating concerns about a potential 2026 slowdown. The company achieved €7.5 billion in net sales during Q3, showcasing robust demand from the AI sector.

BE Semiconductor Industries NV has also surpassed expectations, reporting a 36.5% quarter-over-quarter increase in orders. Gains were largely driven by AI-focused customers in Asia, underscoring the industry's expanding reach and influence across global markets.

SAP SE, Europe's most valuable tech company, has identified AI as a key driver for future growth. While SAP has experienced challenges stemming from trade frictions, its strategic focus on AI innovation continues to enhance its performance.

Nokia Oyj has benefited from growing demand for AI and cloud infrastructure. The telecom company has leaned on its infrastructure capabilities to capture growth opportunities in this rapidly evolving market.

These advancements align with major investments in AI technology from companies like OpenAI, whose commitments to data centers and semiconductor capacity now surpass $1 trillion. These initiatives have fueled confidence across the supply chain, supporting broader earnings growth for the sector.

However, escalating U.S.-China trade tensions have introduced challenges. Washington’s restrictions on advanced AI chip exports to China and Beijing’s limits on rare earth materials essential for semiconductor manufacturing have disrupted supply chains. Firms like STMicroelectronics NV and Texas Instruments Inc have faced reduced orders, particularly from automotive and industrial clients. Additionally, the Dutch government’s recent seizure of Nexperia—a Chinese-owned chipmaker—has amplified uncertainty, particularly within the European automotive sector.

European technology firms remain well-positioned to navigate these complexities and sustain growth, as AI development continues to drive demand for critical infrastructure across global markets.