Live Updates: ASML Drops 7% After Earnings
Key Points
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ASML reports this morning and Wall Street expects:
- Revenue: $8.755 billion (€7.54)
- EPS (Normalized): $6.07 (€5.23)
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Wall Street will be closely watching ASML’s net bookings number which came in light at €3.9 billion last quarter.
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We’ll be updating this live blog once ASML’s numbers come in so stay on this page as new updates will continue appearing.
Live Updates
Earnings Conference Call Highlights
- Market Backdrop: AI as key growth driver for logic (capacity on leading nodes) and memory (HBM/DDR5 transitions). China revenue moderating to backlog proportion (~25%+). Customers adding ~30% EUV capacity YoY. Increasing EUV layers in advanced DRAM for process simplification.
- Uncertainties: Macro/geopolitical developments (e.g., tariffs) causing customer caution; Direct tariff impact limited (working with suppliers/customers); Indirect via GDP/demand harder to quantify. Some customers facing specific challenges affecting capex timing. Backlog adjustment (€1.4B) due to 2024 China controls.
- Technology Progress:
- Low-NA EUV: Strong momentum; NXE:3800E enabling more EUV use in DRAM.
- High-NA EUV: First EXE:5200B shipped/installed (175+ wafers/hour, ~60% productivity gain over EXE:5000); Maturing for HVM; Enables single-exposure vs. multi-patterning, reducing costs and supporting roadmaps.
- Future: Common platforms for low/high-NA by early next decade; Litho intensity rising with EUV adoption and node shrinks.
- Long-term Outlook: Semiconductor market strong; Product mix shifting to advanced logic/DRAM; EUV productivity and High-NA supporting cost reductions and more layers.
- Q&A Themes: EUV mix shifts (upgrades boosting Installed Base, higher ASPs); China demand healthy but adjusted; Tariff uncertainties delaying decisions (not changing fundamentals); Memory strong via AI/HBM; High-NA milestones focused on maturity for HVM; No major litho intensity pause post-2nm.
The call emphasized AI-driven demand amid short-term uncertainties, with ASML preparing for growth while monitoring tariffs and customer plans.
Guidance Overview
ASML still down 10% as of noon EDT and lets review the guidance that left investors less enthused about the stock.
Guidance:
- Q3 2025: Net sales €7.4-€7.9 billion; Installed Base ~€2 billion; Gross margin 50-52%; R&D ~€1.2 billion; SG&A ~€310 million.
- FY 2025: Revenue up ~15% YoY; Gross margin ~52%; Installed Base up >20% YoY; Demand skewed to H2; China >25% of revenue.
- 2026: Preparing for growth but cannot confirm due to uncertainties (macro, geo-political, tariffs); AI demand strong, but customer caution on capex timing.
- Long-term (2030): Revenue €44-€60 billion; Gross margin 56-60% (driven by AI, advanced logic/DRAM, higher EUV layers).
Semiconductor Upgrades Today
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Ticker
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Company
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Analyst Firm
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Rating (Unchanged)
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New Price Target (Old)
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Reasons
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SNPS
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Synopsys
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BofA
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Buy
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$625 ($575)
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Received approval for $35B Ansys acquisition; Ansys tools well-positioned with ~15% exposure to semiconductor market.
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TXN
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Texas Instruments
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Deutsche Bank
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Hold
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$190 ($170)
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Updated model ahead of Q2 report; strong deliveries support Q2.
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AMD
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AMD
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Wells Fargo
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Overweight
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$185 ($120)
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Bullish into Q2 print; increasing estimates; sustained datacenter momentum into second half; roadmap execution and rack-scale strategy.
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Big Sell Off for ASML
After management signaled lower than expected sales guidance, ASML opened trading down 10%. Stay tuned to the conference call to see if glimmers of good news can help alleviate this mornings sell off.
How other semiconductor stocks are looking pre-market
Taiwan Semiconductor (TSM): Down .48%
Applied Materials (AMAT): Down 2.69%
Lam Research (LRCX): Down 3.04%
KLA Corporation (KLAC): Down 2.49%
Q3 Sales Also troubling
ASML’s Q3 sales guidance of €7.4B to €7.9B are significantly below Wall Street’s estimates.
We’ll see what commentary the company provides on their conference call. The stock is still down 7.1% in premarket trading.
Why is ASML Down?
So, if ASML beat on the revenue and earnings last quarter, why is the company down 7% in premarket trading?
There are two primary reasons I’m seeing.
- The company narrowed their revenue guidance to 15% growth this year. Previously ASML had listed a range of €30 billion to €35 billion. That 15% growth target is right in the middle 0f that range (€32.5 billion or so). While Wall Street estimates were a bit below that number at €32.2 billion, ASML had also rallied strongly in the past month. Its likely that institutional investors had anchored on ASML hitting above the midpoint of its prior targets, especially with so many other AI-adjacent stocks seeing phenomenal sales growth recently.
- And in ASML’s CEO commentary on its earnings release the company had this to say: ““Looking at 2026, we see that our AI customers’ fundamentals remain strong. At the same time, we continue to see increasing uncertainty driven by macro-economic and geopolitical developments. Therefore, while we still prepare for growth in 2026, we cannot confirm it at this stage.”
I’ve bolded the last part for emphasis. ASML saying they can’t confirm growth in 2026 introduces significant uncertainty, especially since Wall Street currently expects the company to more than 7% sales growth next year.
A review of ASML's Q2
ASML Holding NV Q2’25 Earnings Highlights:
• Adj. EPS: €5.90 ✅ (Wall St. Estimate of €5.23)
• Revenue: €7.7B (Wall St. Estimate of €7.54)
• Adj. Gross Margin: 53.7% ✅; DOWN -30 bps QoQ
• Net Income: €2.3B
• Net Bookings: €5.5B
Q3’25 Outlook:
• Revenue: €7.4B to €7.9B
– ASML expects total net sales for Q3 2025 to be between €7.4 billion and €7.9 billion, with a gross margin between 50% and 52%. The guidance reflects ongoing demand in the semiconductor sector, particularly driven by advancements in lithography technology and EUV adoption.
– R&D costs are projected to be around €1.2 billion, while SG&A costs are expected to be approximately €310 million.
Q2 Segment Performance:
• Installed Base Management Revenue: €2.1B
• New Lithography Systems Sold: 67 units
• Used Lithography Systems Sold: 9 units
Other Key Q2 Metrics:
• Adj. Operating Income: €4.13B
• Adj. Operating Expenses: €1.5B
• R&D Expenses: €1.2B
• Free Cash Flow: €1.4B
• Effective Tax Rate: 15.0%
• Cash and Cash Equivalents: €7.2B
CEO Commentary:
– Christophe Fouquet: “Our second-quarter total net sales came in at €7.7 billion, at the top end of our guidance. The gross margin was 53.7%, above guidance, primarily driven by higher upgrade business and one-offs resulting in lower costs. We see continued progress in litho intensity, particularly in DRAM, and the introduction of the TWINSCAN NXE:3800E reinforces that momentum. Meanwhile, EUV adoption is advancing as planned, including High NA. This quarter, we shipped the first TWINSCAN EXE:5200B system. Looking at 2026, we see that our AI customers’ fundamentals remain strong. At the same time, we continue to see increasing uncertainty driven by macro-economic and geopolitical developments. Therefore, while we still prepare for growth in 2026, we cannot confirm it at this stage.”
Strategic Updates:
– An interim dividend of €1.60 per ordinary share will be made payable on August 6, 2025. In the second quarter, ASML purchased around €1.4 billion worth of shares under the current 2022–2025 share buyback program.
ASML (Nasdaq: ASML | ASML Price Prediction) reported before U.S. markets open today. The company is the first view into demand for the semiconductor industry this earnings season and is closely watched.
ASML’s stock was already down 22% over the past year, but had been seeing a strong rebound in recent months. That rebound now appears to be ‘paused’ as the stock is dropping 7% in premarket trading. Let’s dive into ASML’s earnings and why Wall Street is reacting so negatively to them.
ASML Earnings Expectations
Here’s what Wall Street expected from ASML.
- Revenue: $8.755 billion (€7.54 billion )
- EPS (Normalized): $6.07 (€5.23)
- Gross Margins: 51.47%
- Net Income (GAAP): $2.343 billion
The company exceeded these numbers, delivering €7.7 billion on the top line and EPS of €5.90.
However, as we’ll continue monitoring in this live blog, the stock is dropping because of forward guidance and commentary from the company in their earnings release.
Key Areas to Watch
ASML is expected to host an hour-long conference call at 9 a.m. ET. Here’s a few areas of focus to watch for.
- Geopolitical Uncertainty: Demand for AI products has remained robust and it appears major ASML customer Taiwan Semiconductor (NYSE: TSM) is pushing ahead with ambitious plans to build out new fabrication plants in America. What does ASML have to say about the impacts of tariffs and U.S. policies on its revenue forecasts and backlog?
- High-NA EUV Commentary: High-NA is the next moneymaker from ASML. The technology will continue pushing lithography systems to greater precision and come with a significant price tag. Wall Street will be closely watching what ASML has to say about recent progress in High-NA and when these systems will enter volume production.
- Booking Momentum: ASML saw bookings fall from €7.1 billion in Q4 down to €3.9 billion last quarter. Net bookings came in at €5.5 billion this quarter. That number exceeded Wall Street estimates, but what commentary will the company provide about future its future bookings pipeline?
Eric Bleeker has been investing for more than 20 years. He began his career working at Microsoft before joining Motley Fool, one of the largest publishers of financial research. In his 15 years at Motley Fool Eric served as the General Manager for Fool.com and led coverage in the Technology & Telecom sector. In addition, he was a featured columnist and has hosted dozens of investing seminars attended by more than a million total investors. Eric has more than 1,000 financial bylines to his name and has been featured in The Wall Street Journal, CNBC, Fox Business, and many other leading publications. He is currently focused on artificial intelligence investing and is a CFA Charterholoder.
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