ASML’s recent financial report caught the market off guard, revealing that the orders for the third quarter were only about half of what analysts had anticipated. Additionally, the company revised its revenue outlook for 2025 downward, leading to a significant drop in its stock price.
On October 15, ASML experienced its steepest decline in 26 years, as its Q3 orders totaled 2.63 billion euros (approximately 2.87 billion dollars), only a slight improvement from 2.6 billion euros in the same period last year. However, this fell dramatically short of market expectations, which were estimated to be around 5.39 billion euros by Bloomberg, and even higher at 5.59 billion euros according to Visible Alpha.
Initially scheduled for release on October 16, the report was prematurely made public on October 15 during the New York stock pre-market session. ASML attributed this early disclosure to a “technical issue,” and subsequently removed the report from its website. Unfortunately, this technical problem not only triggered a sharp decline in ASML’s stock but also negatively impacted other semiconductor stocks across Europe and the U.S. ASML’s shares plummeted by 15.6% at the close of trading in Amsterdam, marking the largest drop since June 1998, with trading even briefly halted at one point. Meanwhile, Nvidia, which had already opened lower, saw its losses extend to 5% by midday, and TSMC’s ADR fell by more than 2%, with the Philadelphia Semiconductor Index down by 4%.
In its official data, ASML reported that its net sales for the last quarter amounted to 7.47 billion euros, surpassing analysts’ estimates of 7.12 billion euros and exceeding its previous guidance of 6.7 to 7.3 billion euros. The net profit stood at 2.08 billion euros, beating market expectations of 1.9 billion euros, while the gross margin was reported at 50.8%, aligning closely with market predictions.
Looking ahead, ASML has revised its net sales guidance for 2025 to between 30 billion and 35 billion euros, which is at the lower end of its previous forecast and below market expectations of 35.8 billion euros. The company also indicated a gross margin forecast of 51% to 53% for next year, again lower than prior guidance. ASML’s CEO, Christophe Fouquet, noted that the delay in demand for EUV technology is a significant factor, stating that the recovery is expected to be slower than previously anticipated and is likely to continue into 2025, causing customers to adopt a more cautious approach.
ASML’s stock has dropped 30% since reaching a record high in July, driven by increased restrictions on its business in China from the U.S. and a general weakening in the industry, with the Chinese market still contributing nearly half of its sales as of the last quarter.
