The global photolithography giant ASML experienced a significant earnings disappointment, leading to a 17% plunge in its stock price, which in turn dragged down the U.S. semiconductor sector and the three major indices. The company has revised its sales target for 2025, raising concerns in the market about a slowdown in semiconductor demand growth, which has negatively impacted chip stocks such as Nvidia.

On October 15, 2024, ASML, a global leader in photolithography equipment, unexpectedly published its third-quarter financial results for 2024 ahead of schedule due to a technical error. These results significantly fell short of market expectations, thereby raising widespread concerns among investors. Although the company reported revenues of €7.47 billion, which exceeded expectations, its order intake was only €2.63 billion—a 53% quarter-over-quarter decline and substantially below the anticipated €5.39 billion. Moreover, ASML revised its sales target and gross margin guidance for 2025, now forecasting net sales between €30 billion and €35 billion, a decrease from the previous estimate of €30 billion to €40 billion.

As a result of this disappointing earnings report, ASML experienced a more than 17% decline in its stock price on the U.S. market, marking the largest single-day drop since 1998. Furthermore, the repercussions extended to the broader semiconductor sector, with several related stocks—including AMD, Nvidia, and Broadcom—experiencing declines; notably, Nvidia's share price fell by over 6.6% during intraday trading.

Additionally, the negative market sentiment following ASML's report also impacted the three major U.S. indices. Although the Dow Jones Industrial Average and the S&P 500 had reached record highs on October 14, the release of ASML's disappointing results ultimately dampened market enthusiasm. Nvidia, a leading producer of AI chips, had seen its stock reach a nearly four-month high on October 14; however, it subsequently experienced a decline in response to ASML's adverse news.

ASML's financial report indicates that, while demand for AI chips remains robust, other segments of the semiconductor market are weaker than anticipated. Consequently, this has led logic chip manufacturers to postpone orders, while memory chip producers plan only "limited" increases in capacity. These developments suggest that, despite the demand growth driven by advancements in AI technology, a broader recovery in the semiconductor market may take longer than previously expected.

How to Invest Using uSMART

After logging into the uSMART HK app, click on the "Search" option located at the top right of the page. Enter the stock code, such as " ASML " to access the details page where you can review transaction details and historical trends. Then, click on the "Trade" option at the bottom right corner, select the "Buy/Sell" function, and finally fill in your transaction conditions before submitting your order.