Shares of the semiconductor equipment manufacturer ASML fell by 16% on Tuesday following an unexpected early release of the company’s financial results, which included disappointing sales forecasts. This development caused a ripple effect, leading to declines in other chip stocks, including Nvidia, Advanced Micro Devices (AMD), and Broadcom.
ASML, headquartered in Veldhoven, Netherlands, stated that it anticipates net sales for the year 2025 to range between 30 billion euros and 35 billion euros, which is at the lower end of the previously provided forecast range. The company’s net bookings for the September quarter amounted to 2.6 billion euros, significantly below the 5.6 billion euros anticipated by the LSEG consensus estimate. However, net sales exceeded expectations, reaching 7.5 billion euros.
CEO Christophe Fouquet commented in the earnings release that although there are strong developments and potential in AI, other market segments are recovering more gradually than initially expected. The early release of ASML’s financial results occurred due to a technical error that led to an accidental publication on a section of its website. Prior to the earnings announcement, Wall Street analysts had adopted a more cautious stance regarding the company, which is a key supplier in the semiconductor industry.
ASML is also facing a challenging business environment due to U.S. and Dutch export restrictions affecting shipments to China. Recently, the U.S. government implemented new export controls on critical technologies to China, including advanced chipmaking tools. Additionally, the Dutch government announced plans to regulate the export of ASML’s machinery to China. ASML’s extreme ultraviolet lithography machines are utilized by major global chipmakers, such as Nvidia and Taiwan Semiconductor Manufacturing, for the production of advanced chips.
ASML’s Chief Financial Officer, Roger Dassen, expressed expectations for the company’s business in China to reach a more normalized percentage in both order book and business operations. He projected that China would represent about 20% of ASML’s total revenue for the coming year, aligning with its current backlog. In the earnings presentation for the June quarter, ASML revealed that 49% of its sales were from China.
Analysts at Bernstein, responding to ASML’s results, noted that the underwhelming order book and downgraded outlook for 2025 are likely to overshadow third-quarter performance. They stated that the revised guidance indicates a delayed cyclical recovery and specific customer challenges impacting 2025 forecasts. Analysts at Cantor remarked that the discouraging outlook could negatively affect semiconductor stocks. However, they stressed that the updated outlook does not imply any change in the growth trajectory for AI.
