The trade export restrictions imposed on ASML showed up in the company’s results. ASML lost 16.26% on Tuesday after the firm pre-posted quarterly results.
The company posted bookings falling by 53% Q/Q to EUR 2.63 billion. This is nowhere near Bloomberg’s consensus estimate of EUR 5.39 billion. Net sales increased by 20%, while net income grew by 32% Q/Q to EUR 2.08 billion.
ASML issued a strong Q4 sales outlook, while its gross margin will meet analyst estimates. Still, for the full year of 2025, the company cut its net sales forecast (EUR 30 billion to EUR 35 billion). The lowered guidance pulled shares of Intel (INTC), Broadcom (AVGO), Taiwan Semiconductor (TSM), and Nvidia (NVDA) lower. Applied Materials (AMAT), KLA Corp.
(KLAC), and Lam Research (LRCX) fell by more. Each firm lost more than 10% yesterday, as investors sold chip equipment makers.
Risks for the AI Market
Trade restrictions are one of many reasons that will act as a catalyst for a correction in AI stocks. Markets have unrealistic growth expectations for AI-related projects. AI has yet to improve customer service, automate tasks, and increase worker efficiency. Firms continue to buy Nvidia-powered AI servers, training their large language models (“LLMs”).
Eventually, customers will cut costs and focus on realized revenue from AI-based projects.
ASML stock gets a hold rating.
