ASML Holding (ASML) shares crashed the most in 26 years on Tuesday after the Dutch semiconductor giant accidentally posted its third-quarter earnings report one day before its official release. The leaked report revealed a 53% plunge in bookings, far below the average expectations of Wall Street analysts.
On ASML's earnings call this morning, CEO Christophe Fouquet apologized to investors for Tuesday's mess, calling the early earnings release a "technical error."
ASML's disappointing earnings report and outlook took center stage during the call. CFO Roger Dassen informed investors about reduced guidance for 2025, forecasted to be in the lower half of the range of between 30 billion euros and 35 billion euros.
Here's the breakdown of the third quarter (courtesy of Bloomberg):
-
Bookings EU2.63 billion, -53% q/q, estimate EU5.39 billion (Bloomberg Consensus)
-
Net sales EU7.47 billion, +20% q/q, estimate EU7.17 billion
-
Gross margin 50.8% vs. 51.5% q/q, estimate 50.7%
-
Net income EU2.08 billion, +32% q/q, estimate EU1.91 billion
-
Cash and other EU4.99 billion, -0.7% q/q, estimate EU4.86 billion
ASML slashed 2025 net sales and gross margin guidance as demand for AI wanes.
Fourth quarter forecast:
- Sees net sales EU8.8 billion to EU9.2 billion, estimate EU8.95 billion
- Sees gross margin 49% to 50%, estimate 50.5%
2025 forecast:
- Sees net sales EU28 billion, estimate EU27.71 billion 2025 YEAR FORECAST
- Sees gross margin 51% to 53%, saw about 54% to 56%, estimate 53.9%
- Sees net sales EU30 billion to EU35 billion, saw about EU30 billion to EU40 billion, estimate EU35.94 billion
Fouquet pointed out that a slower chip market recovery will likely extend "well into 2025." He noted that a slow demand recovery sparked "customer cautiousness and some pushouts in their investments."
This dismal outlook stems from delayed demand for ASML's EUV lithography machines, which are required to manufacture the world's most advanced chips. This ominous outlook comes despite the CEO saying the AI boom, energy transition, and electrification trends continue.
Readers should know that ASML lithography machines are produced for companies like Samsung Electronics and Taiwan Semiconductor Manufacturing, which produce AI chips for Apple and Nvidia. Signs of troubles originating from ASML may suggest storm clouds are nearing for the AI bubble.
In European markets, ASML shares plunged 16% on Tuesday —the most since 1998. Shares on Wednesday leaked lower, down 5%.
ASML's slide sent ripples across global semiconductor and tech stocks this week. In the US, this resulted in more than a $420 billion of market value loss for an index of US-traded chip stocks.
Mounting troubles at ASML may only suggest troubling signs are ahead for the AI bubble.