Shares of ASML, a top supplier of advanced lithography equipment for semiconductor production, experienced a significant decline on Tuesday following the company’s announcement of lower-than-expected third-quarter bookings and a downgrade in its 2025 revenue guidance. As a result, other semiconductor stocks also saw a downturn.
On the stock market, ASML’s shares dropped by 16.3%, closing at $730.43.
Although the Dutch semiconductor equipment manufacturer reported an increase in third-quarter profit, it warned of challenging conditions ahead. Chief Executive Christophe Fouquet indicated in a press release that, while advancements in artificial intelligence (AI) continue to present opportunities, other segments in the market are recovering more slowly than anticipated. “It now appears the recovery is more gradual than previously expected,” Fouquet stated, noting that this trend is likely to persist into 2025, resulting in increased caution among customers.
The Philadelphia Semiconductor Index, known as SOX, fell by 5.3%. This index includes the 30 largest semiconductor companies traded in the U.S.
Other semiconductor equipment manufacturers also suffered losses, including KLA, which dropped 14.7%; Applied Materials, down 10.7%; and Lam Research, declining by 10.9%.
Among other large semiconductor firms, Nvidia fell 5%, AMD decreased by 5.2%, and Broadcom retreated by 3.5%. Chip designer Arm Holdings saw a significant drop, plummeting 6.9%.
ASML had initially planned to release its third-quarter results on Wednesday but opted to do so a day earlier.
Weak Guidance Impacts ASML Stock
“ASML’s disappointing bookings were a major takeaway from their announcement, coming in significantly below expectations,” noted Bernstein analyst Sara Russo in a client memo. “When paired with the reduced guidance for 2025, these factors are likely to overshadow an otherwise solid Q3.”
ASML reported bookings of 2.6 billion euros (approximately $2.8 billion), far short of the consensus expectation of 5.4 billion euros ($5.9 billion).
For the third quarter, the company reported earnings of $5.80 per share on sales of $8.21 billion. This exceeded analysts’ expectations of $5.36 per share on sales of $7.87 billion. Year-over-year, ASML’s earnings rose by 14.4%, while sales increased by 16.8%.
Looking ahead, ASML anticipates fourth-quarter revenue to be between 8.8 billion and 9.2 billion euros, with the midpoint of $9.8 billion aligning with analyst forecasts.
The company also revised its 2025 revenue outlook to the lower half of the range of 30 billion to 40 billion euros, having previously indicated the upper half.
Russo has rated ASML stock as outperform with a price target of 1,052.