ASML Holding ( ASML , Financial ) shares rallied 7% on Wednesday in European trading after the Dutch semiconductor-equipment company reported fourth-quarter results that beat expectations and rolled out growth expectations above analyst expectations despite recent turbulence in the AI sector.

Net bookings for the company came in at 7.09 billion euros ($7.37 billion) compared with analysts' estimates of 3.99 billion euros expected by Visible Alpha. Net sales were EUR9.26 billion and net income EUR2.69 billion both above target. The semiconductor machinery equipment maker also forecasted first-quarter sales of EUR7.5 billion to EUR8.0 billion, higher than forecasts, and reaffirmed a 2025 revenue outlook of EUR30 billion to EUR35 billion.

Equally, according to CEO Christophe Fouquet, 'AI is the key driver for growth' in the semiconductor industry, highlighting ASML's key supply of extreme ultraviolet (EUV) lithography machines that are needed to produce advanced AI chips.

A rebound follows an AI-driven selloff in the stock after the Chinese startup DeepSeek claimed a low-cost, cutting-edge AI model sent a shockwave through major chipmakers. The stock of ASML fell one on Tuesday and has tumbled more than 20 percent this year as markets have become volatile.

ASML's strong quarterly results support the potential stabilization of demand for the sector, even with competitive pressures and geopolitical uncertainty in the semiconductor supply chain.

This article first appeared on GuruFocus .