ASML’s Stock Takes a Dive After Lowering 2025 Sales Forecast
The semiconductor industry was sent into a tailspin on Tuesday after ASML Holding N.V. (ASML), a Dutch semiconductor equipment giant, released its third-quarter earnings report a day early. The report, which revealed a significant downward revision in the company’s 2025 sales outlook, caused ASML’s stock to plummet by over 16%. This dramatic drop reflects investor concerns about the future growth prospects of the semiconductor sector.
ASML’s 2025 Sales Forecast: A Cause for Concern
ASML’s third-quarter report unveiled a revised 2025 net sales guidance range of 30 billion euros to 35 billion euros ($32.7 billion to $38.2 billion). This represents a significant reduction from the previously stated range of 30 billion euros to 40 billion euros. The company attributed this downgrade to a slower-than-expected recovery in key market segments, despite the strong growth from artificial intelligence (AI) investments.
ASML’s president and CEO, Christophe Fouquet, explained the situation: “While there continue to be strong developments and upside potential in AI, other market segments are taking longer to recover. It now appears the recovery is more gradual than previously expected. This is expected to continue in 2025, which is leading to customer cautiousness.” The CEO further emphasized that the new 2025 sales forecast falls within the lower half of the range previously presented at the company’s Investor Day.
Solid Q3 Results, But a Bleak Outlook
Despite the negative news about its 2025 forecast, ASML delivered solid third-quarter results. Total net sales for Q3 2024 reached 7.5 billion euros, exceeding analyst expectations of 7.12 billion euros. The company also reported a net income of 2.1 billion euros and a gross margin of 50.8%. ASML’s quarterly net bookings reached 2.6 billion euros, with 1.4 billion euros of those bookings attributed to EUV (extreme ultraviolet) systems, demonstrating continued demand for advanced chip manufacturing equipment.
For the fourth quarter of 2024, ASML projects total net sales between 8.8 billion euros and 9.2 billion euros, with a gross margin between 49% and 50%. The company also reaffirmed its full-year 2024 guidance, projecting total sales of around 28 billion euros.
The Wider Impact: A Sector-Wide Downturn
The negative reaction to ASML’s earnings leak rippled across the broader semiconductor sector, pulling down other major players. By midday Tuesday, the iShares Semiconductor ETF (SOXX) had fallen by 3.7%, its worst trading session in over a month. The VanEck Semiconductor ETF (SMH) experienced an even steeper decline, dropping by over 4%. The following semiconductor stocks were among the worst performers:
* ASML Holding N.V. (ASML) -16.55%
* KLA Corporation (KLAC) -9.88%
* Applied Materials, Inc. (AMAT) -8.68%
* Lam Research Corporation (LRCX) -7.54%
* Onto Innovation Inc. (ONTO) -7.15%
* Arm Holdings plc (ARM) -6.44%
* Nvidia Corp. (NVDA) -5.52%
This widespread decline in semiconductor stocks highlights the sector’s sensitivity to shifts in market sentiment and growth projections. ASML’s lowered sales outlook serves as a stark reminder of the challenges facing the semiconductor industry, raising questions about its future trajectory.