Investment Rating - The report maintains a **Buy** rating for ASML (ASML O) with a target price of $950 for FY2025 based on a Forward PE of 36x [3][12] Core Views - **New orders fell short of expectations** in Q3 2024, with new orders totaling €2 64 billion, significantly below the expected €5 39 billion This was primarily due to delays in advanced process technologies by certain customers and the failure of HBM products to pass NVIDIA's testing, leading to postponed demand for lithography machines [3][11] - **AI related demand remains strong**, but the company revised its 2025 revenue guidance downward to €300 350 billion (from €300 400 billion) and lowered its gross margin guidance to 51% 53% (from 54% 56%) due to slower recovery in non AI demand and delays in customer processes [3] - **Long term upside potential** exists due to shifts in market share among foundries, with key customer TSMC expected to benefit from 2nm and more advanced processes, driving demand for advanced lithography equipment [3] Financial Performance - **Q3 2024 revenue** was €7 47 billion, up 12% YoY and 20% QoQ, exceeding consensus estimates of €7 20 billion Gross margin was 50 8%, in line with expectations, while GAAP net profit reached €2 08 billion, up 10% YoY and above consensus estimates of €1 91 billion [7] - **EUV shipments** in Q3 2024 were 11 units, below the expected 14 units, while ArFi shipments were 38 units, exceeding the expected 27 units EUV revenue was €2 07 billion, below the expected €2 64 billion, while DUV revenue was €3 73 billion, above the expected €2 87 billion [9] - **Backlog of orders** stood at €35 7 billion in Q3 2024, up 2% YoY but down 8% QoQ [3] Regional Performance - **China accounted for 47% of Q3 2024 revenue**, but this is expected to normalize to around 20% in the future Other regions included South Korea (15%), Taiwan (15%), the US (21%), and Japan (2%) [10] Market and Industry Insights - **Foundry competition** is shifting, with potential upside from market share redistribution among foundries TSMC is expected to maintain strong demand for advanced lithography equipment due to its leadership in 2nm and beyond processes [3] - **High NA EUV progress** is on track, and ArFi revenue (excluding China) is expected to grow YoY in FY2025 However, delays in advanced process technologies by some customers and the end of counter cyclical capacity expansion in China may lead to a YoY decline in China revenue for FY2025 [12]

The company is currently seeing weak orders for its semiconductor manufacturing machines.The world is awash in semiconductors. Companies are spending tens of billions of dollars to build new computer chips for the artificial intelligence (AI) boom. It is no surprise, then, that one of the leading equipment makers for semiconductors, ASML (ASML 3.23%), was up 40% year to date at one point recently.As of this writing, the company has given up all of these gains. Even though the narrative was for insatiable de ...

Investment Rating - The investment rating for ASML has been downgraded to "Neutral" due to adverse factors such as headwinds in the mature process market and adjustments in key customer production plans [3]. Core Views - ASML's Q3 2024 performance exceeded expectations with revenues of €7.467 billion, a year-over-year increase of 11.9% and a quarter-over-quarter increase of 19.6%. Net profit for the same period was €2.077 billion, up 9.7% year-over-year and 31.6% quarter-over-quarter [1]. - However, the company reported a significant drop in new orders, totaling €2.633 billion, which is a 52.7% decrease quarter-over-quarter and below the consensus estimate of €5.896 billion. The total order backlog at the end of the quarter was €36 billion, down from €39 billion in the previous quarter [1][3]. - For Q4 2024, ASML provided revenue guidance of €8.8-9.2 billion, slightly above the consensus estimate of €8.751 billion [1]. Financial Summary - Revenue projections for ASML are adjusted to €28.07 billion for 2024, €31.84 billion for 2025, and €38.00 billion for 2026, reflecting a decrease from previous estimates [3]. - Net profit estimates are revised to €7.409 billion for 2024, €9.406 billion for 2025, and €11.701 billion for 2026 [3]. - The company’s gross margin is expected to be 50.5% in 2024, improving to 51.6% in 2025 and 53.3% in 2026 [3][12]. Market Data - As of October 17, 2024, ASML's closing price was $700.60, with a total share capital of 393 million shares and net assets amounting to €16.152 billion [2]. - The earnings per share (EPS) is projected to be €19.00 in 2024, increasing to €24.37 in 2025 and €30.62 in 2026 [12]. Industry Outlook - The long-term outlook remains positive due to anticipated demand for AI infrastructure and terminals, although short-term challenges persist due to slow recovery in the mature process semiconductor supply-demand relationship [3]. - Key customers, including Intel and Samsung, have announced reductions in capital expenditures, which may negatively impact ASML's performance in the near term [3].

Core Insights - ASML Holding N.V. reported worse-than-expected results for its third quarter, leading to a significant decline in its stock price by 16% on the first day following the announcement [1] - The company also reduced its sales forecast for 2025, indicating potential challenges ahead in meeting market expectations [1] Financial Performance - The third-quarter results were below analysts' expectations, which has raised concerns among investors regarding the company's growth trajectory [1] Market Reaction - Following the disappointing earnings report, ASML's stock experienced a sharp drop, reflecting investor sentiment and market volatility in response to the news [1]

This sell-off looks like a great buying opportunity.As almost every investor knows by now, artificial intelligence (AI) has been driving the current bull market since its start in 2023.The launch of OpenAI's ChatGPT has set off a new arms race in the industry, and generative AI technology could be as transformative as the internet. While stocks with exposure to artificial intelligence, like the semiconductor sector, have generally done well, some stocks have done better than others.Nvidia, for example, just ...

I am a full-time analyst interested in a wide range of stocks. With my unique insights and knowledge, I hope to provide other investors with a contrasting view of my portfolio, given my particular background.If you have any questions, feel free to reach out to me via a direct message on Seeking Alpha or leave a comment on one of my articles.Analyst’s Disclosure: I/we have a beneficial long position in the shares of ASML, NVDA, TSM either through stock ownership, options, or other derivatives. I wrote this a ...

Many investors are curious about ASML stock after the price dropped by roughly 20%.Investors should evaluate several important factors from ASML's (ASML 3.23%) latest results before jumping in to buy the dip.*Stock prices used were the afternoon prices of Oct. 15, 2024. The video was published on Oct. 17, 2024. ...

This account is managed by Noah's Arc Capital Management. Our goal is provide Wall Street level insights to main street investors. Our research focus is mainly on 20th century stocks (old economy) undergoing a 21st century transformation, but occasionally we'll write on companies that help transform 20th century firms as well. We look for innovations in a business model that will cause a stock to change dramatically. Associated with SA contributors Thomas Potter and Elijah Buell.Analyst’s Disclosure: I/we h ...

Why China is not the only issue the company is facing.Shares of ASML Holding (ASML 2.50%) plunged after the maker of semiconductor equipment lowered guidance and said that recovery in some chip markets would extend into 2025. The drop pushed the stock into negative territory on the year.The stock came under pressure earlier this year after the U.S. government announced it was looking to implement more strict trade restrictions on companies that sell advanced technology to China, which extended beyond U.S. c ...

The semiconductor equipment giant's stock plunged following its latest quarterly report.ASML Holding (ASML 2.50%) released its third-quarter 2024 results a day earlier than expected, and it delivered a rude shock to investors who were expecting robust growth thanks to the booming demand for semiconductors on the back of the thriving market for artificial intelligence (AI) chips.Instead, the Dutch chipmaking equipment supplier reported a sharp decline in bookings and also tempered its expectations for 2025. ...