Well, European chipmaker ASML throwing cold water on yesterday's chip stock rally. The company walking back its 2026 growth forecast, citing trade risks and global tensions. Joining me now, Patrick Morehead, more insight strategy founder, CEO, and chief analyst.Patrick, it's good to see you. So, um, you know, ASML, maker of these lithography machines that are basically crucial in the chipm. They're seen usually as sort of a bell weather or an indicator.So what does it tell us that they are seeing this tarif ...

Core Insights - ASML Holding N.V. has experienced a rebound of over 40% from its lows, indicating a strong recovery in its stock performance [1] Financial Performance - ASML reported its Q2 FY 2025 earnings, which are crucial for assessing the company's financial health and operational efficiency [1]

Core Viewpoint - ASML's stock is experiencing significant sell-offs despite reporting strong second-quarter earnings, primarily due to cautious forward guidance from management [1][2][5] Financial Performance - ASML reported a net profit of 2.29 billion euros (approximately $2.66 billion) and sales of 7.7 billion euros (approximately $8.95 billion) for Q2, surpassing analyst expectations of 2.04 billion euros in profit and 7.52 billion euros in sales [4] - Year-over-year sales increased by roughly 23%, with a gross margin of 53.7% for the period [4] Future Outlook - The company anticipates annual revenue growth of approximately 15% and a gross margin of around 52% for the current year [5] - However, management expressed uncertainty about growth prospects for the next year due to macroeconomic and geopolitical risks, leading to investor concerns and subsequent stock sell-offs [5]

Group 1 - The article raises concerns about ASML Holding N.V.'s peaked earnings growth, particularly following the transition from DUV to EUV technology [1] - There is an increasing reliance on DUV bookings, which may pose risks to future earnings [1] - The author emphasizes a focus on investing in companies within oligopolistic sectors that have high barriers to entry, indicating a preference for stability and growth potential [1] Group 2 - The author has a background in mechanical engineering and has transitioned from the oil and gas sector to focus on global equities, particularly in the semiconductor industry [1] - The investment approach highlighted is growth at a reasonable price, with a mid- to long-term investment horizon [1] - The article aims to provide small investors with valuable investment ideas in the technology sector, specifically in semiconductors, robotics, and energy [1]

Core Viewpoint - ASML Holding N.V.'s stock price declined following its second-quarter earnings presentation, indicating market concerns regarding the company's production capabilities for advanced technology [1]. Financial Performance - The earnings presentation revealed potential challenges in producing certain advanced equipment, which may impact future revenue growth [1]. Market Reaction - The negative reaction in the stock price suggests investor apprehension about ASML's ability to meet market demands and maintain its competitive edge in the high-tech sector [1].

Key Metrics - ASML reported net sales of 6.2 billion euros for Q2 2024, increasing to 7.7 billion euros in Q2 2025, representing a 24% growth and beating expectations [1] - Earnings per share (EPS) rose from 4.01 euros in Q2 2024 to 5.90 euros in Q2 2025, marking a 47% increase and also beating expectations [1] - New units sold decreased from 89 to 67, a decline of 25% [1] - Net bookings remained flat at 5.5 billion euros, down 2% year-over-year [1] Company Performance - ASML's revenue and earnings increased by 24% and 47% year-over-year, respectively, despite a reduction in the number of systems sold [3] - The company is experiencing strong demand for its newer, high-end lithography technology, with 2.3 billion euros of net bookings specifically for higher-end systems [3] - ASML achieved a gross margin of 53.7% in the quarter [3] Market Outlook - The company expressed concerns about future growth due to uncertainties faced by semiconductor customers, influenced by trade restrictions and tariff policies [4] - CEO Christophe Fouquet noted that while fundamentals for AI customers remain strong, there is increasing uncertainty from macro-economic and geopolitical developments [4] - ASML is preparing for growth in 2026 but cannot confirm it at this stage [4] Investor Reaction - Following the cautious guidance regarding 2026, ASML shares fell by 8% in premarket trading [5] - Despite the short-term concerns, the long-term growth narrative remains intact, driven by ongoing demand for semiconductors and related manufacturing equipment [6] Geopolitical Context - Recent changes in the geopolitical landscape, such as the U.S. reversing a ban on Nvidia selling chips in China, may positively impact ASML's outlook [7] - The CFO attributed the second-quarter performance partly to tariffs having a "less negative" impact than expected, suggesting that ASML's caution regarding 2026 could be overly conservative if trends continue [7]

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Core Viewpoint - ASML Holdings' stock price dropped over 8% in pre-market trading after the release of its Q2 earnings, presenting a potential buying opportunity that may not last long [1] Financial Performance - ASML reported Q2 revenue of $8.92 billion, a 23% increase year-over-year, outperforming consensus estimates by 200 basis points, driven by strength in new technology [3] - The company achieved GAAP earnings of $6.84, which was nearly 90 cents, or 1,500 basis points, better than expected, indicating strong margin performance [5] Guidance and Market Outlook - The guidance for F2026 was uncertain, with no specific figures provided, attributed to macroeconomic headwinds affecting the semiconductor industry [2] - Despite the uncertainty, the Q2 report and guidance for Q3 and F2025 suggest that the business is expected to remain strong through 2026 [2][5] Market Sentiment and Analyst Ratings - Analysts maintain a Moderate Buy rating on ASML, with a 12-month price target of $923.80, indicating a potential upside of 25.91% from the current price [8][9] - Institutional ownership is below 50%, but there is a trend of buying among institutions, supporting the stock's price action [9] Balance Sheet and Capital Returns - ASML's balance sheet remains solid, with net cash and low leverage, allowing for sustained capital returns, including a dividend yield of approximately 0.97% and share buybacks reducing the share count by an average of 1.3% in Q2 [6][7] Market Dynamics - The stock's performance may be influenced by its ability to maintain price levels near moving averages around $750; a drop below this level could lead to a deeper pullback [11] - Short interest in ASML has been increasing, although it remains low below 1% of the float, presenting a potential headwind for the stock [12]

Group 1 - Almonty is conducting a secondary offering priced at $4.50 for 20 million shares, managed by Oppenheimer & Cantor Fitzgerald, DA Davidson, and Scotiabank [1] - Nova Minerals is also executing a secondary offering priced at $9.25 for 1.2 million shares, managed by ThinkEquity [1] - Aura Minerals is launching an IPO priced at $24.25 for 8.1 million shares, with management from BofA, Goldman Sachs, BTG Pactual, Itau BBA, Bradesco BBI, NBCF, RBC Capital, and Scotiabank [1] - Mega Fortune is initiating an IPO priced at $4.00 for 3.75 million shares, managed by D. Boral Capital [3] - K-Tech Solutions is planning an IPO priced at $4.00 for 1.6 million shares, managed by American Trust Investment Services [4]

Market Overview - US stock indices opened higher but experienced slight declines before rebounding slightly, with the Dow Jones at 44060.38 (+0.08%), Nasdaq at 20686.21 (+0.04%), and S&P 500 at 6246.34 (+0.04%) [2] - Chinese concept stocks showed weakness, with the Nasdaq Golden Dragon China Index down over 2% [4] Economic Data - The US Producer Price Index (PPI) for June unexpectedly came in lower than expected, with a year-on-year increase of 2.3%, the lowest since September 2024, compared to an expected 2.5% and a previous value of 2.6% [2] - Month-on-month PPI remained flat, marking the lowest since January, against an expected increase of 0.2% [2] Company-Specific News - ASML, a leading Dutch lithography equipment manufacturer, saw its stock drop over 10% due to concerns over the impact of US tariffs on its growth prospects [2][3] - ASML's CEO indicated that the company may not achieve growth by 2026 due to the effects of US tariff policies [3] - The semiconductor industry, including ASML, is increasingly vulnerable to potential US trade restrictions, with rising machine and chip prices amid geopolitical uncertainties [4] Chinese Tech Stocks - Major Chinese tech stocks experienced declines, with Baidu down over 7%, Alibaba down over 2%, and JD.com down nearly 2% [5][6] - The Wande Chinese Technology Leaders Index fell by 1.38%, and the Wande Chinese Stocks 100 Index decreased by 2.11% [5] Commodity Market - Domestic commodity futures mostly declined, with copper down 0.19%, alumina down 1.24%, and coking coal down over 1% [6] - International crude oil, silver, and gold prices also saw significant drops [6] Economic Outlook - Bank of America forecasts that the Federal Reserve will not lower interest rates before next year, with expectations of moderate economic growth of about 1.5% by year-end [7] - The CEO of Bank of America noted that both personal and corporate clients continue to spend, seeking certainty in the market [7]