The 2024 AI Frenzy Isn’t Helping ASML Stock. Here’s Why.


  • ASML (ASML) stock is falling after the chip equipment firm reported lower-than-expected Q1 orders.
  • Worries about the economic outlook and upcoming changes in technology could have negatively impacted ASML’s orders.
  • ASML stock is still up more than 25% so far in 2024.
ASML stock - The 2024 AI Frenzy Isn’t Helping ASML Stock. Here’s Why.

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ASML (NASDAQ:ASML) is one of the top trending tickers today as ASML stock falls more than 6% as of this writing. This downturn comes after the Netherlands-based company — which makes machinery for semiconductor manufacturing — reported that orders tumbled in the first quarter compared to Q4.

Here’s what investors should know as ASML stock falls further today.

ASML and the Q1 Results

ASML’s net bookings came in at 3.6 billion euros ($3.84 billion) for Q1 2024, well below analysts’ average estimate for almost 5.1 billion euros. Also noteworthy, the company generated net profit of 1.22 billion euros ($1.29 billion). That was down from 2.05 billion euros in Q4. Finally, its revenue fell to 5.2 billion euros ($5.52 billion) from 7.24 billion euros.

In response to the news, Quilter Cheviot analyst Ben Barringer cited worries about the “incredibly uncertain” economic environment as a potential reason for a ASML’s weaker-than-expected performance. The analyst also pointed to a coming “transition in product” for chipmakers in 2025.

ASML’s Outlook

Despite the disappointing orders, ASML noted that it has not changed its 2024 guidance, as it expects to benefit from the chip sector’s rebound in Q3 and Q4. However, the company expects its overall 2024 revenue to be little changed versus 2023. “We see 2024 as a transition year,” said ASML CEO Peter Wennink, according to Barron’s.

ASML expects to deliver better results in 2025, when a number of large chipmakers — including Taiwan Semiconductor (NYSE:TSM) and Samsung — are expected to open new fabs in the United States. Additionally, spending on ASML’s machinery could ramp up next year as chipmakers prepare for the next stage of the artificial intelligence (AI) spending cycle.

Meanwhile, analysts at ING believe investors should not be overly concerned with the downturn in ASML’s bookings, since its order totals can fluctuate a great deal. “Order intake is notoriously lumpy,” said analyst Marc Hesselink, per Reuters.

The Price Action of ASML Stock

Heading into today, shares of ASML stock were little changed in the preceding month but up by more than 25% so far in 2024.

On the date of publication, Larry Ramer 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 Publishing Guidelines.

Larry Ramer has conducted research and written articles on U.S. stocks for 15 years. He has been employed by The Fly and Israel’s largest business newspaper, Globes. Larry began writing columns for InvestorPlace in 2015. Among his highly successful, contrarian picks have been SMCI, INTC, and MGM. You can reach him on Stocktwits at @larryramer.

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