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 InvestorPlace.com Publishing Guidelines.
