ASML Holding (AS:ASML) shares plunged more than 16% Tuesday after the semiconductor equipment maker announced deep cuts to its 2025 sales forecast and reported third-quarter results that fell short of analyst expectations.
The stock fell by an additional 5% in Wednesday's premarket.
ASML posted Q3 adjusted earnings of €5.28 per share, missing the consensus estimate of €5.40. Revenue came in at €7.47 billion, below the expected €7.9 billion but up 19.6% YoY. The company's quarterly net bookings of €2.6 billion significantly missed estimates of €5.39 billion.
For the fourth quarter, ASML expects revenue between €8.8 billion and €9.2 billion, with a gross margin of 49% to 50%. The company expects its full-year 2024 revenue forecast to be around €28 billion.
Looking ahead to 2025, ASML projects revenue of €30 billion to €35 billion, the lower half of its previous guidance range, with gross margins of 51% to 53%, below prior expectations.
"While a weaker-than-expected 2025 outlook was expected given recent capex cut by Intel (NASDAQ:INTC), Samsung’s foundry/HBM manufacturing woes, and weak non-AI semis demand, the magnitude of the correction is a negative surprise," Citi analysts commented.
Separately, JPMorgan (NYSE:JPM) analysts said ASML expects its AI-related business "to continue to be a source of upside, but rebounds in markets other than AI have taken time, so the company expects the impact to continue in 2025.'
The company noted slower ramps of new nodes at certain customers in the Logic segment, leading to fab push-outs and changes in lithography demand timing, particularly for EUV systems. In Memory, ASML sees limited capacity additions, with a focus on AI-related technology transitions.
ASML declared an interim dividend of €1.52 per share, payable on November 7, 2024.
CEO Christophe Fouquet cited a more gradual market recovery than anticipated, stating, "While there continue to be strong developments and upside potential in AI, other market segments are taking longer to recover."
Elsewhere, names such as Nvidia (NASDAQ:NVDA) and AMD (NASDAQ:AMD) have also declined following the ASML release.
Sam Boughedda contributed to this report.