Semiconductors Slump After ASML Results ReleasedYesterday, semiconductor stocks declined due to a surprise earnings release by Dutch semiconductor giant ASML Holding ((ASML) ). ASML’s earnings were released yesterday on the company’s website due to an apparent technical error. ASML, which counts Taiwan Semiconductor ((TSM) ), Intel ((INTC) ), and Samsung Electronics as its largest clients, beat Wall Street expectations handily but provided weak forward earnings guidance, citing slower expected demand for AI ...

A day after the stock plunged, investors weren't encouraged by management commentary.Shares of ASML (ASML -6.46%) were falling for the second day in a row today. After the chip equipment maker accidentally reported results yesterday, investors seemed to give a thumbs-down to its earnings call this morning that added some color to its downbeat guidance for 2025.The chip stock was down 5.6% on the news as of 12:23 p.m. ET on Wednesday. ASML sees slowing demandThere weren't any groundbreaking revelations in to ...

Financial Data and Key Metrics Changes - Total net sales for Q3 2024 reached EUR 7.5 billion, exceeding guidance due to increased DEEP UV system sales and higher installed base management sales [9] - Gross margin for the quarter was 50.8%, within guidance, with operating expenses for R&D at EUR 1.06 billion and SG&A at EUR 297 million [10] - Free cash flow improved to EUR 534 million, although pressure remains due to lower order intake and higher inventory levels [10] - Q3 net system bookings totaled EUR 2.6 billion, with a backlog exceeding EUR 36 billion at the end of Q3 2024 [11] Business Line Data and Key Metrics Changes - Net sales comprised EUR 2.1 billion from EUV sales and EUR 3.8 billion from non-EUV sales, with logic accounting for 64% of net system sales and memory for 36% [9] - Installed Base Management sales were EUR 1.54 billion, driven by higher service and upgrade revenue [9] Market Data and Key Metrics Changes - The order intake reflects a slow recovery in traditional end markets, with customers remaining cautious [11] - The company expects Q4 total net sales between EUR 8.8 billion and EUR 9.2 billion, with installed base management sales around EUR 1.9 billion [12] Company Strategy and Development Direction - The company continues to focus on advancing EUV technology, with significant improvements in throughput and performance expected from the new NXE:3800E system [14] - The strategy includes preparing for new fabs globally to meet future demand, with a focus on building capacity to respond to anticipated increases in demand throughout the decade [21] Management's Comments on Operating Environment and Future Outlook - Management noted that while AI is a key driver for industry recovery, other segments are recovering more slowly than anticipated, leading to cautious customer behavior [16] - The outlook for 2025 revenue has been adjusted to EUR 30 billion to EUR 35 billion, reflecting a slower recovery and reduced growth expectations [19] Other Important Information - The company declared a quarterly interim dividend of EUR 1.52 per ordinary share for Q3 2024, with the next payment scheduled for November 7, 2024 [13] - Management emphasized the importance of maintaining operational flexibility in response to market dynamics and customer demand [47] Q&A Session Summary Question: Changes in China Demand - Management indicated that the normalization of China sales is due to a combination of backlog adjustments and cautiousness regarding export controls, projecting China to represent 20% of total sales in 2025 [26][70] Question: 2025 Gross Margin Guidance - The reduction in expected EUV shipments and changes in product mix are key factors influencing the 2025 gross margin guidance, which is now expected to be between 51% and 53% [20][29] Question: Impact of Customer Push Outs - Management acknowledged that customer push outs are a mix of slower end demand and competitive dynamics, affecting the timing of fab constructions [35][36] Question: Installed Base Management Growth - Management expects healthy double-digit growth in installed base management for 2025, driven by service and upgrade revenues [39] Question: High NA Technology Adoption - Interest in High NA technology is increasing, with positive performance data being generated, although discussions about future improvements are long-term [42][61] Question: Order Levels Needed for Guidance - To reach the midpoint of the new guidance, the company needs approximately EUR 2 billion in orders by the end of the year, with some flexibility for orders coming in Q1 [66] Question: DUV Growth Outside China - Management expressed confidence in significant growth for DUV outside China, correlating with EUV demand, particularly in leading nodes [84]

Analyst’s Disclosure: I/we have a beneficial long position in the shares of ASML, NVDA, AMD, TSMC, AVGO either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being gi ...

A Dutch chipmaking giant sparked chaos after it accidentally published a disappointing financial outlook a day earlier than scheduled – slashing billions in market value across the semiconductor sector.Shares of ASML — which manufactures equipment used to make chips, including the processors used to power artificial intelligence — sank nearly 6% Wednesday. The stock had plunged 16% a day earlier – equating to a loss of more than $52 billion in market value.That was after ASML’s third-quarter results mysteri ...

It's been a week to forget for ASML Holding NV (NASDAQ:ASML). The Dutch-based semiconductor stock is down 4% to trade at $730.30 today, extending its 16.3% selloff yesterday after the company's accidentally-released early third-quarter results showed a sharp drop in orders. ASML also trimmed its 2025 full-year guidance, prompting three price-target cuts from overseas brokerages. ASML breached its year-to-date breakeven level yesterday, and is now heading for its lowest close since January.  Since a July 11 ...

Financial Data and Key Metrics Changes - Total net sales for Q3 2024 reached €7.5 billion, exceeding guidance due to increased DPV system sales and higher installed base management sales [6] - Net system sales amounted to €5.9 billion, comprising €2.1 billion from EUV sales and €3.8 billion from non-EUV sales [6] - Gross margin for the quarter was 50.8%, while net income was €2.1 billion, representing 27.8% of total net sales, resulting in an EPS of €5.28 [7][8] - Free cash flow improved to €534 million, although pressure remains due to low order intake and high inventory levels [8] - Q3 net system bookings totaled €2.6 billion, with a backlog exceeding €36 billion at the end of the quarter [10] Business Line Data and Key Metrics Changes - Installed base management sales for Q3 were €1.54 billion, driven by higher service and upgrade revenue [7] - Net system bookings were balanced between memory (54%) and logic (46%) [10] Market Data and Key Metrics Changes - The recovery in traditional end markets is slow, with customers remaining cautious [10] - The company expects China business to normalize to about 20% of total revenue, reflecting a return to historical levels [20][21] Company Strategy and Development Direction - The company continues to focus on advancing EUV technology, with significant improvements in throughput and performance expected from new models [14][16] - Long-term growth drivers in semiconductor markets remain strong, particularly in AI and energy transition applications [23][24] - The company plans to build capacity to meet future demand, despite current market softness [52] Management's Comments on Operating Environment and Future Outlook - Management noted that while AI is a key driver for industry recovery, other segments are recovering more slowly than anticipated, extending recovery into 2025 [17][18] - The company has adjusted its 2025 revenue expectations to the lower half of the previously provided range, anticipating €30 billion to €35 billion [20][21] - Management expressed cautious optimism regarding customer demand, particularly in light of competitive dynamics and market uncertainties [60][61] Other Important Information - The company declared a second quarterly interim dividend of €1.52 per ordinary share, payable on November 7, 2024 [12] - R&D expenses for Q4 are expected to be around €1.09 billion, with SG&A expenses at approximately €300 million [12] Q&A Session Summary Question: What is driving the normalization of China demand? - Management indicated that normalization is due to a combination of backlog adjustments and cautious views on export controls, expecting China to represent about 20% of total sales [27][28] Question: How does the 2025 gross margin guidance reflect changes in immersion shipments? - Management clarified that immersion expectations have not dramatically changed since the 2022 Investor Day, but the overall mix and volume of EUV units have significantly impacted gross margin expectations [31][34] Question: How much of the EUV shipment cuts will spill over to 2026? - Management noted that customer feedback indicates tools are being pushed out, which could mathematically lead to some orders moving into 2026 [38][39] Question: What is the outlook for installed base management growth in 2025? - Management expects healthy double-digit growth in installed base management, driven by service and upgrade revenues [45] Question: How is the company managing capacity targets in light of updated 2025 expectations? - The company is executing on long lead time items while slowing down short-term investments due to current market softness, preparing for future demand increases [52][53] Question: What is the expected impact of AI on future demand? - Management remains optimistic about AI driving demand, particularly in server markets, and anticipates developments in this area in the coming months [68][70]

Shares of Nvidia fell 5% as global chipmakers lost $420 billion in market cap on Tuesday. (Photo via ... [+] Smith Collection/Gado/Getty Images).GettyKey Takeaways Chip Stocks Dropped Significantly Due To ASML's Slower Recovery Warning Nuclear Energy Stocks Rallied, Driven By AI's Growing Energy Needs Morgan Stanley Outperformed, While Banking Sector Faces Interest Income ChallengesStocks fell on Tuesday led by a $420 billion drop in the global chip stocks. The S&P 500 fell by 0.8%. The Nasdaq Composite dro ...

ASML Holdings (NASDAQ: ASML), the Dutch semiconductor equipment giant, experienced a dramatic stock price crash on Tuesday, falling by 16% in one of its steepest declines in 20 years.This sharp drop, which erased over $55 billion from its market value, occurred after the company accidentally published its third-quarter financial results a day early. The results revealed a disappointing outlook for 2025, with significantly lower-than-expected new orders, sending shockwaves across the semiconductor sector. AS ...

Company Performance - ASML's third-quarter net sales reached 7.5 billion euros, beating expectations, but net bookings were only 2.6 billion euros, significantly below the 5.6 billion euro consensus estimate [2] - ASML shares plunged as much as 16% on Tuesday, causing the company to lose over $50 billion in market capitalization in a single day [2] 2025 Outlook - ASML expects net sales for 2025 to be between 30 billion euros and 35 billion euros, which is at the lower half of the previously guided range [1] - The company's CFO, Roger Dassen, expects the China business to show a "more normalized percentage" in the order book and business [2] - UBS analysts noted that the change in ASML's 2025 guidance is mainly related to delays in the development of new logic fabrication facilities from Intel and Samsung, implying a 25% to 30% decline in sales to China in 2025 [2] Geopolitical Impact - ASML provided the first glimpse into how U.S. restrictions on exports of its advanced chip manufacturing tools to China will impact its sales in the Asian country [1] - Geopolitical tensions are putting pressure on ASML's 2025 outlook, particularly affecting its China business [2] Industry Context - ASML is a critical part of the global chip supply chain, with its extreme ultraviolet lithography machines used by major chipmakers like Nvidia and Taiwan Semiconductor Manufacturing to produce advanced chips [1]