Why ASML Stock Was Diving Today

Shares of ASML (NASDAQ: ASML) were tumbling today after the leading producer of lithography equipment for semiconductors accidentally published its earnings results ahead of schedule this morning, and disappointed the market with the news.

As a result, the stock was down 16.4% as of 12:01 p.m. ET.

Image source: Getty Images.

ASML dials back its 2025 forecast

ASML delivered solid results in the third quarter with revenue of 7.47 billion euros, which was equal to $8.14 billion, ahead of estimates at $7.82 billion.

That figure represents 11.2% growth from the quarter a year ago, and 19.6% growth from the second quarter, showing the company is rebounding from an earlier lull in purchases ahead of an expected ramp-up into next year.

The company sold 106 lithography systems in the quarter, up from 89 in the second quarter, and it reported solid growth on the bottom line, as earnings per share (EPS) rose to 5.28 euros, compared to 4.01 euros in the second quarter. That translated into $5.75 in EPS, which compared to $5.27 in the quarter a year ago and beat estimates at $5.33.

CEO Christophe Fouquet said that net sales in the quarter were above guidance, "driven by more DUV [deep ultraviolet machines] and Installed Base Management sales." The installed base management segment mostly refers to service.

However, the company dialed back its forecast for 2025 as Fouquet said:

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.

What it means for ASML

That slowdown seems to reflect challenges at customers including Intel and Samsung, who have both slowed their foundry investments recently.

The company guided for revenue of 8.8 billion to 9.2 billion euros in the fourth quarter, but its 2025 forecast of 30 billion to 35 billion euros was below the consensus at 36.3 billion euros.

That forecast understandably disappointed investors, though it reflects market conditions rather than ASML's competitive position. Considering that, this looks like a buying opportunity for patient investors.

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Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends ASML. The Motley Fool recommends Intel and recommends the following options: short November 2024 $24 calls on Intel. The Motley Fool has a disclosure policy.