The stock of ASML Holding (ASML) fell 16% after the Dutch semiconductor equipment maker reported quarterly financial results that missed Wall Street targets.
For the recently completed third quarter of the year, ASML reported net bookings of 2.6 billion euros ($2.83 billion U.S.), which was far below the 5.6 billion euros expected among analysts.
The company, which is based in the Netherlands, also issued weak forward guidance, saying it expects net sales for 2025 of between 30 billion euros ($32.72 billion) and 35 billion euros, which is the lower end of the range it issued previously.
ASML’s poor Q3 results and soft outlook pulled the entire chip sector lower. Microchip giants Nvidia (NVDA) and Advanced Micro Devices (AMD) each saw their share prices fall 5%.
Some chip stocks fell even further, with shares of Applied Materials (AMAT) dropping 11% after ASML, which is viewed as a bellwether for the sector, issued its financial results.
ASML’s extreme ultraviolet lithography machines are used by nearly all the world’s major chipmakers to produce processors that run artificial intelligence (AI) applications and models.
As a company, ASML Holding is heavily exposed to China, with nearly half (49%) of its sales coming from the nation of 1.4 billion people.
Management at ASML blamed the company’s exposure to China for its poor results, claiming demand for its products has declined as the Chinese economy slumps.
ASML executives said that they expect sales in China to normalize over the next six to 12 months.
The stock of ASML is up 24% on the year and currently trading at $191.02 U.S. per share.
