TLDR
- ASML reported mixed Q1 results with sales of €7.74 billion ($8.81 billion), slightly missing forecasts
- Q2 sales guidance of €7.2-7.7 billion came in below analyst expectations of €7.8 billion
- Trump’s tariff announcements have increased market uncertainty according to CEO Christophe Fouquet
- Despite near-term challenges, ASML maintains its 2025 sales forecast of €30-35 billion
- Company remains optimistic long-term, projecting sales between €44-60 billion by 2030
ASML Holding’s stock fell sharply after the Dutch semiconductor equipment maker released its first-quarter earnings report. The company, which holds a virtual monopoly on advanced lithography machines needed to manufacture cutting-edge chips, saw its shares drop more than 6% in early trading.
The stock decline came after ASML reported mixed first-quarter results and issued second-quarter guidance that fell short of analyst expectations. The company cited increased uncertainty related to President Trump’s recently announced tariff plans as a key factor affecting outlook.
ASML reported first-quarter sales of €7.74 billion ($8.81 billion), representing strong year-over-year growth from €5.29 billion but slightly missing analyst forecasts of €7.77 billion. Net profit jumped 93.4% to €2.36 billion, exceeding market expectations.
For the second quarter, ASML provided a sales forecast range of €7.2 billion to €7.7 billion with a gross margin between 50% and 53%. This guidance fell below Wall Street’s forecast of €7.8 billion.
Tariff Concerns Impact Outlook
The company took the unusual step of widening its guidance range, pointing to uncertainty surrounding recent tariff announcements by the Trump administration. These include a proposed 10% minimum rate on goods from all countries, though the administration subsequently announced a 90-day pause on reciprocal levies for all trading partners except China.
“Our conversations so far with customers support our expectation that 2025 and 2026 will be growth years. However, the recent tariff announcements have increased uncertainty in the macro environment and the situation will remain dynamic for a while,” said Chief Executive Christophe Fouquet in a statement.
The tariff situation appears to be creating hesitation among some ASML customers, potentially pushing the company’s full-year revenue toward the lower end of its forecast range.
Net bookings for the first quarter totaled €3.94 billion, down from fourth-quarter 2024 bookings of €7.09 billion. While this represents a 9.1% increase from the year-ago quarter, it fell short of the analyst consensus estimate of €4.89 billion.
Customer Concentration Challenges
Market analysts have noted that ASML faces increased dependence on orders from Taiwan Semiconductor Manufacturing (TSMC) due to reduced spending from other major customers like Samsung Electronics and Intel.
This customer concentration comes at a time when ASML’s stock has already faced pressure. The company’s American depositary receipts have fallen by nearly a third over the past 12 months, despite ASML’s strategic position in the artificial intelligence chip manufacturing supply chain.
ASML’s System segment, which includes sales from new and used lithography systems, has been a growth driver with a compound annual growth rate of 17% over the past four years, according to Main Street Data.
Long-Term Outlook Remains Positive
Despite near-term challenges, ASML maintained its annual guidance for 2025 total net sales to be in the range of €30 billion to €35 billion, with a gross margin of 51% to 53%.
This forecast is consistent with previous guidance, though it represents a significant reduction from estimates provided before a shocking cut in projections last year.
Looking further ahead, CEO Fouquet expressed confidence in ASML’s long-term growth trajectory. The company anticipates net sales could reach between €44 billion and €60 billion by 2030, driven by continued expansion of AI technologies and increasing demand for advanced semiconductors.
Wall Street maintains a generally positive view on ASML stock despite recent price declines. According to recent analyst ratings, the company has a “Moderate Buy” consensus based on five Buy and two Hold recommendations. The average price target of $941.36 suggests a potential upside of 37.79% from current levels.
ASML shares were down over 4% in pre-market trading following the earnings release, continuing the downward trend that has seen the stock fall nearly 9% over the past three months.
The company’s position as the sole provider of the most advanced lithography equipment needed for manufacturing cutting-edge semiconductors continues to provide a strong competitive moat, despite the current market headwinds.
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