asml shares stumble despite strong q1 earnings: what's spooking investors?
Veldhoven, Thursday, 17 April 2025.
asml, the semiconductor giant, reported impressive first-quarter earnings of $6.80 per share on $8.77 billion in sales, exceeding analyst expectations. despite this q1 success, asml’s stock price plunged over 7% on april 15th. the reason? the company’s q2 sales guidance fell short of projections, triggering concerns about a possible slowdown in equipment sales and the impact of global tariffs. is this a temporary setback or a sign of deeper challenges for asml?
q1 earnings beat expectations
ASML’s first-quarter results showcased a strong performance, with earnings reaching $6.80 per share and sales totaling $8.77 billion [1]. This exceeded analyst predictions, which had estimated $6.16 per share on $8.32 billion in sales [1]. In comparison to the previous year, ASML’s earnings per share increased significantly from $3.31, and sales rose from $5.63 billion [1]. The company also highlighted the shipment of its fifth High NA (numerical aperture) system, with these advanced systems now in use at three customer locations [1].
q2 guidance disappoints
Despite the positive first-quarter results, ASML’s stock experienced a downturn due to its second-quarter sales guidance falling short of analyst expectations [1]. The company anticipates sales of 7.45 billion euros ($8.47 billion) for the second quarter [1]. Analyst projections, however, had estimated sales of 8.36 billion euros ($9.5 billion) [1]. This discrepancy between the company’s forecast and analyst estimates triggered investor concerns about a potential slowdown in sales [1].
order book concerns and market reaction
The announcement of weaker-than-expected order numbers further contributed to the negative market sentiment [3]. New orders totaled approximately 4 billion euros, falling short of the 7.1 billion euros recorded in the previous quarter and the 4.8 billion euros anticipated by analysts [3]. Consequently, ASML’s stock price experienced a significant drop, with shares plummeting by over 7% in early trading in Amsterdam [3]. This decline reflects investor apprehension regarding the company’s short-term momentum and order intake [7].
impact of global trade tensions
Adding to the uncertainty, ASML’s management cautioned about the potential impact of increasing global trade tensions and import tariffs [3][4]. CEO Christophe Fouquet acknowledged that while customer conversations suggest growth in 2025 and 2026, the recent tariff announcements have increased macroeconomic uncertainty [1][7]. TD Cowen analyst Krish Sankar noted that ASML is still assessing the direct and indirect effects of global tariffs, with the 2025 outlook remaining unchanged at this time [1].
expert analysis and future outlook
Despite the recent stock decline, some analysts maintain a positive long-term outlook for ASML. Degroof Petercam lowered its price target for ASML from 925 to 800 euros but maintained a buy recommendation [6]. The firm acknowledged that while first-quarter results aligned with expectations, order intake was somewhat weak [6]. ASML anticipates revenue between 30 billion and 35 billion euros for 2025, with a gross margin between 51% and 53% [7]. The company expects second-quarter revenue between 7.2 billion and 7.7 billion euros [4][7].