asml defies tariff headwinds with 17% stock surge: buy, sell, or hold?
Veldhoven, Thursday, 22 May 2025.
asml’s stock price jumped 17% in one month, beating the s&p 500 despite new tariffs. the company holds a near-monopoly on euv lithography, a critical technology for advanced chip manufacturing. first-quarter results for 2025 show a 46% increase in sales, with net income up 92%. analysts project a 15% revenue growth for asml in 2025. should investors hold, accumulate, or take profits now?
dominance in euv lithography
ASML’s technological leadership is anchored in its near-monopoly on extreme ultraviolet (EUV) lithography [1]. This technology is essential for manufacturing advanced chips at 3nm and below [1]. High-NA EUV technology is designed for even smaller sub-2nm nodes [1]. Chipmakers such as TSMC, Samsung, and Intel rely on ASML’s EUV systems [1]. ASML’s unique position makes it a critical player in the semiconductor industry, bolstering its long-term market prospects [1].
tariff concerns and market reaction
Despite positive financial results, ASML’s CEO cautioned that new U.S. tariffs on the semiconductor industry introduce long-term uncertainties [2]. These tariffs could impact global supply chains and technological advancements [2]. In response to these concerns and lower-than-expected order numbers, ASML’s stock experienced a 4% drop in pre-market trading [2]. The U.S. and China reached a deal last week to temporarily reduce tariffs [1]. The U.S. will lower tariffs on Chinese imports to 30% from 145%, and China will reduce duties on U.S. imports to 10% from 125% [1]. The new adjustments will be effective for 90 days [1].
financial performance and outlook
ASML’s first-quarter 2025 results showcased strong financial performance [1]. Net sales reached €7.74 billion, a 46% year-over-year increase [1]. Net income soared to €2.36 billion, a 92% increase [1]. Earnings per share (EPS) grew by 93% to €6.00 [1]. The company anticipates a 15% revenue growth and a 70-basis-point margin expansion in 2025 [1]. ASML’s forward 12-month P/E ratio is 26.2, exceeding the sector’s average of 25.5 [1]. Competitors like KLA Corporation, Lam Research, and Applied Materials have P/E multiples of 24.1, 21.25, and 17.09, respectively [1].
analyst perspectives and market dynamics
ASML holds a Zacks Rank #2 (Buy), indicating positive analyst sentiment [1]. However, the CEO’s warning about U.S. tariffs highlights potential headwinds [2]. The semiconductor industry is projected to grow from $452 billion in 2021 to $803 billion by 2028 [1]. ASML’s stock performance is also influenced by broader market trends [4]. For example, adjustments to chip禁令 by governments can cause stock prices to fluctuate [4]. Recent news indicates that Nvidia’s AI chip revenue is expected to more than double by 2030, reflecting the dynamic nature of the semiconductor market [3].