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When a high-quality company has a fall, it's usually a good buying opportunity.
Samsung Electronics has postponed taking deliveries of ASML chipmaking equipment for its upcoming factory in Texas as it has yet to win any major customers for the project, three people familiar with the matter said.
The stock dropped 16% earlier this week, after the company lowered its 2025 outlook.
ASML stock plummeted 26% in two days due to earnings released early and disappointing guidance. The company faces normalization of China demand, export controls, and lower-than-expected recovery of non-AI-related equipment demand. Despite challenges, ASML is set for double-digit growth next year and now offers an even more attractive valuation.
The company reported an update to its expectations for 2025 that disappointed investors.
ASML dropped 22% in two days due to a 53% sequential decline in bookings, resulting in weaker-than-expected revenue growth and gross margin outlook for FY2025, driven by weak EUV growth. This bookings decline was largely driven by lower demand from "certain customers," possibly in China, which is expected to account for 20% of total revenue exposure in FY2025. Management indicated a more "normalized percentage" for China's exposure moving forward, implying a lower revenue mix beyond FY2025.
Ashwath Rao, senior research analyst at Counterpoint Research, discusses Dutch chip equipment maker ASML's third-quarter earnings report.
'Mad Money' host Jim Cramer takes stock of chip stocks after ASML's disappointing results.
'Mad Money' host Jim Cramer takes stock of chip stocks after ASML's disappointing results.
ASML, a critical player in the semiconductor industry, holds a monopoly on advanced lithography systems crucial for producing smaller, faster chips. Despite solid financials and a strong moat, ASML's recent Q3 results showed subdued growth and cautious customer orders, leading to a 20% share price drop. The company's heavy reliance on China and broader semiconductor demand slowdown pose significant risks, warranting caution for new investors.