asml defies market expectations with record earnings
Veldhoven, Thursday, 30 January 2025.
ASML, a leading Dutch semiconductor equipment maker, has reported record-breaking financial results for the fourth quarter of 2024. The company’s net sales soared to 9.26 billion euros, surpassing the forecasted 9.07 billion euros. Net profit also exceeded expectations, reaching 2.69 billion euros. This performance was fueled by a remarkable 169% increase in net bookings, amounting to 7.09 billion euros, significantly above analyst predictions. The relentless demand from AI chip manufacturers bolstered ASML’s market position and investor confidence, as reflected in an 11% stock price surge in Europe. Looking ahead, ASML remains optimistic about 2025, maintaining its sales outlook between 30 to 35 billion euros. Despite the initial fears surrounding AI model DeepSeek, no significant impact on chip demand has been reported, which is seen as a positive indicator for the industry. ASML CEO Christophe Fouquet cites the lower AI costs as a key driver of increased demand.
Order backlog and strategic outlook
ASML’s robust performance is underpinned by a substantial order backlog of 36 billion euros as of late 2024 [1]. CEO Christophe Fouquet expressed optimism about the emergence of low-cost AI models, stating that reduced AI costs could drive broader adoption and increased chip demand [1]. This view is particularly significant as the company aims to maintain its industry leadership position amid evolving market dynamics.
Market response and analyst perspectives
The market responded positively to ASML’s performance, with shares climbing significantly [3][4]. Morningstar’s Chief Equity Strategist Michael Field suggests the stock has more room to grow, setting a target price of 850 euros [1]. The company’s strategic decision to discontinue quarterly order reporting from 2025, announced by CFO Roger Dassen, aims to focus on long-term business trends rather than short-term fluctuations [5][6].
China market rebalancing
A notable shift is occurring in ASML’s geographic revenue distribution, with Chinese market revenue share decreasing from 47% to 27% in Q4 2024 [6]. Fouquet attributes this to the completion of backlogged orders from 2022 and earlier [1]. This rebalancing aligns with ASML’s expectations for 2025, suggesting a more diversified global revenue stream [1].
Technological advancement and dividends
ASML demonstrated technological leadership by delivering three High-NA EUV systems in 2024 [4]. The company’s financial strength is further reflected in its dividend policy, with plans to distribute 6.40 euros per share for 2024, marking a 4.9% increase from 2023 [4]. A mid-term dividend of 1.52 euros per share is scheduled for February 19, 2025 [4].