ASML, the Dutch semiconductor equipment giant, saw its shares plummet 15.6% after releasing lower-than-expected sales forecasts earlier than planned. This unexpected drop not only affected ASML but also dragged down other major chip stocks, including Nvidia, Advanced Micro Devices (AMD), and Broadcom, which all experienced a decline of at least 4%.
The company adjusted its 2025 sales forecast, now predicting revenue between €30 billion and €35 billion ($32.7 billion to $38.1 billion), at the lower end of its previous estimates. While net sales for the September quarter exceeded expectations, reaching €7.5 billion, new bookings came in at a disappointing €2.6 billion, far below the €5.6 billion forecasted by analysts.
CEO Christophe Fouquet explained that while AI developments remain promising, recovery in other sectors has been slower than anticipated. He noted that this sluggish rebound is contributing to the cautious outlook for 2025. The early release of ASML’s financial results was attributed to a technical glitch on their website.
ASML's challenges aren't limited to sales forecasts. The company is grappling with growing pressure in China due to export restrictions imposed by both the U.S. and Dutch governments. These restrictions target advanced chipmaking technologies, including ASML’s cutting-edge extreme ultraviolet (EUV) lithography machines, which are crucial for producing advanced semiconductors for clients like Nvidia and Taiwan Semiconductor Manufacturing Co. (TSMC). ASML expects China's share of its business to normalize around 20% next year, down from 49% of its total sales in the June quarter.
While ASML’s net sales exceeded expectations, industry analysts have expressed concerns about the company's weakened order book and reduced guidance. Bernstein analysts warned that these factors may overshadow the company's otherwise solid Q3 performance, citing ongoing cyclical delays and specific customer challenges. Cantor analysts echoed this sentiment, calling ASML's outlook "clearly disappointing" but emphasizing that the company’s AI-related growth prospects remain strong.
As ASML navigates a complex market, balancing the AI boom with slowing recovery in other sectors and geopolitical tensions, the next few years will test its ability to stay at the forefront of semiconductor innovation while managing global regulatory challenges.
