asml stock: tariff headwinds create buying opportunity?
Veldhoven, Sunday, 20 April 2025.
despite asml’s dominance in euv lithography and strong long-term growth prospects, tariff uncertainties are creating near-term stock volatility. analysts suggest a potential 10% tariff on us imports could impact asml’s margins. the company’s shares are down over 6% since its q1 2025 earnings report. the dip could represent a buying opportunity, especially with high-na euv adoption expected to boost margins by 2027-28.
tariff impact on asml’s financials
ASML’s full-year 2025 revenue guidance remains between €30 billion and €35 billion, but the company has signaled it may lean towards the lower end due to geopolitical issues [2]. First quarter net bookings were €3.9 billion, falling short of analysts’ expectations of €4.89 billion, which could indicate a potential slowdown in revenue [2]. Despite these challenges, ASML projects a gross margin of 51% to 53% for 2025 [3]. The potential imposition of tariffs could increase operational costs, impacting ASML’s financial performance [2].
euv technology and market dominance
ASML holds a unique position as the sole supplier of high-end EUV systems, commanding a $150 million monopoly [3]. These systems are critical for manufacturing advanced integrated circuits [2]. The company’s focus on AI-driven demand and its strategic positioning are seen as strengths, despite potential geopolitical and supply chain risks [2]. ASML’s CEO, Christophe Fouquet, identifies AI as a primary growth driver [3]. Foundries in Taiwan and South Korea are expanding aggressively to meet the growing demand for AI chips, further fueling the need for ASML’s advanced lithography tools [3].
geopolitical risks and mitigation strategies
ASML faces geopolitical risks, including potential tariffs that could raise operational costs and affect its business [2]. The U.S. CHIPS Act and EU semiconductor initiatives are driving demand for ASML’s technology [3]. U.S. and Dutch export restrictions have reduced China’s contribution to ASML’s sales to approximately 20%-25% [3]. ASML is likely to pass tariff-induced costs onto its customers, which include major players like Intel, TSMC, and Samsung [2]. Despite these challenges, Wall Street consensus gives ASML a ‘strong buy’ rating [2].
analyst perspectives and future outlook
Ling Lee Keng, an analyst at DBS, highlights ASML’s strong financial performance, strategic positioning, and technological advancements, even with geopolitical risks and supply chain disruptions [2]. ASML targets a long-term revenue of €44 billion to €60 billion by 2030, with a gross margin of 56% to 60% [3]. The company aims for an 8% to 14% annual sales growth rate through 2030 [3]. Investors are advised to monitor ASML’s Q2 2025 results for insights into EUV adoption rates and geopolitical factors [3].