2024 isn’t off to a great start for ASML Holding (NASDAQ:ASML). The Dutch company, which produces equipment for chipmakers, is watching shares fall today after an announcement from the government of the Netherlands. Due to a new policy, part of the company’s export license to deliver machines to China has been revoked, causing ASML stock to fall amid rising uncertainty.
This development threatens to end a month of fairly steady growth for shares. With a new year underway, the company is now facing a questionable future as the geopolitical landscape shifts in a direction that could further compromise chipmakers and semiconductor-related firms.
Does this mean investors should approach ASML with caution in 2024? Let’s take a closer look.
What’s Happening With ASML Stock?
ASML stock began the day by falling sharply and, so far, the stock hasn’t hinted at a rebound. As of this writing, shares are down about 4% for the day.
This stock began climbing back in late November 2023, even as other chipmakers cooled. But now this regulatory news threatens to curb its momentum. As The Wall Street Journal reports:
“Dutch semiconductor companies have had to seek government permission since September before they can sell some advanced types of chip-making equipment abroad, the Dutch government said in June. The rule came after national-security officials from the Netherlands, Japan and the U.S. reached an agreement to start restricting such exports, aiming at limiting China’s access to advanced semiconductor technologies.”
At a time when the chip market faces an uncertain future, this kind of setback is the last thing ASML needed. InvestorPlace’s Luke Lango has speculated that investors should look beyond chip stocks for artificial intelligence (AI) exposure. And while other experts have touted ASML as a likely trillion-dollar company, this news could change such bullish projections.
While it’s true that, as Reuters notes, ASML “dominates the market for lithography systems,” the Dutch government’s recent policy could reduce its market share. China has also criticized the policy but, for as long as it holds, ASML stock will be forced to contend with some significant uncertainty.
On the date of publication, Samuel O’Brient did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
