asml's rally at risk? analysts flag potential downturn

2025-05-20 asml

Veldhoven, Tuesday, 20 May 2025.
asml holding, a key player in semiconductor equipment, faces challenges that could trigger a stock decline. analysts are raising concerns about slower demand. book-to-bill metrics signal trouble. tariff pressures are impacting revenue and margins. an analyst has reissued a ‘sell’ rating. despite a recent share buyback of 61.5 million EUR, the stock remains 34% below its 52-week high. can asml defy the headwinds?

market performance and valuation

As of today, ASML NV stock is trading at 661.70 EUR, a slight decrease of 0.21% [4]. Its market capitalization stands at 260.51 billion EUR [4]. Key figures include a price-to-earnings ratio of 35.25 and a dividend yield of 0.94% [4]. Despite its monopoly in the semiconductor industry, ASML’s stock has experienced significant volatility, losing nearly 45% of its market value in a few months [5]. The stock’s price-to-earnings ratio, which exceeded 50 in the summer of 2024 amid AI hype, has now corrected to 23 [5].

factors influencing stock decline

Several factors contribute to the cautious outlook on ASML’s stock. Slower demand, indicated by book-to-bill metrics, is a primary concern [1]. Tariff challenges are also impacting revenues and gross margins [1]. Potential oversupply pressures add to the negative sentiment [1]. Stricter export controls for high-tech to China further strain the lithography specialist’s business [2]. Economic uncertainties, geopolitical tensions, and potential trade conflicts are dampening investor confidence [5].

ASML has been actively buying back its own shares to return value to shareholders [2]. Between May 5 and May 9, 2025, the company repurchased 100,095 shares for 61.5 million EUR [2]. This buyback program has been ongoing since November 2022 [2]. Despite these efforts, the stock is trading approximately 34% below its 52-week high of 1,015 EUR, reflecting persistent investor concerns [2]. It remains to be seen whether these buybacks can reverse the downward trend [2].

technological leadership and future prospects

Analysts generally agree that ASML’s technological leadership remains secure [2]. The growing demand for AI chips could positively influence ASML in the long term [2]. The company’s high-precision EUV lithography systems are essential for producing advanced semiconductors, which drive the AI market [2]. ASML plans to introduce a new EUV model in 2025 [5] [alert! ‘status of introduction is not confirmed’]. Management maintains its sales targets for 2025, expecting revenues between 30 and 35 billion EUR [5].

order book and financial targets

ASML’s recent quarterly figures have been disappointing. New orders in the first quarter of 2025 totaled 3.9 billion EUR, falling short of expectations [2]. In a prior quarter, orders surpassed consensus by over 4 billion EUR, but this quarter’s figures are one billion EUR below [5]. VAT Group, a key ASML supplier, has lowered its medium-term financial targets, reducing its 2027 sales target to between 1.5 and 1.7 billion CHF from a previous 1.8 to 2.2 billion CHF [3].

Bronnen

ASML stock Tariff challenges