ASML Stock Drops to $910 in 2025 Despite Q1 Profit Beat: What Investors Should Know

Essential Insights

• ASML's American depositary receipts (ADRs) declined during intraday trading after reporting Q1 sales below market forecasts.
• The Dutch tech leader produces advanced semiconductor manufacturing equipment for giants like Samsung, TSMC, and Intel.
• Despite the sales shortfall, ASML maintains a positive full-year sales outlook, expecting growth in the latter half of 2024.

Shares of ASML Holding (ASML), a Dutch manufacturer specializing in cutting-edge semiconductor fabrication machines, fell 6.8% to $910.49 following the release of its first-quarter earnings report. While the company exceeded net income expectations, posting €1.22 billion ($1.30 billion) with an EPS of €3.11 ($3.31), total sales reached €5.29 billion ($5.63 billion), falling short of the estimated €5.42 billion ($5.77 billion).

ASML supplies key industry players including Samsung, Taiwan Semiconductor Manufacturing Company (TSMC), and Intel, providing essential tools for chip production. CEO Peter Wennink described 2024 as a "transition year," emphasizing ongoing investments in expanding production capacity and pioneering technology.

The company reaffirmed its annual sales guidance, anticipating relatively flat revenue compared to 2023, with a projected sales acceleration in the second half of the year. Notably, export restrictions from the Netherlands to China, previously expected to reduce deliveries by 10-15%, were not addressed in this report.

ASML stands to benefit from the U.S. CHIPS and Science Act, which supports semiconductor manufacturing growth domestically. As major firms like Intel and Samsung develop new facilities, demand for ASML’s equipment is expected to rise.

Jefferies analysts remain optimistic, maintaining a "buy" rating and identifying ASML as a "top pick." They view recent price declines as a buying opportunity ahead of anticipated sales growth later in 2024.

Despite the recent dip, ASML's stock has surged 27% year-to-date and 42% over the past 12 months, reflecting its pivotal role in the evolving semiconductor landscape.

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