ASML CEO Apologies for Premature Earnings Report Resulting in Share Crash

ASML Holding Shares Plunge

ASML Holding (ASML) experienced its most significant share crash in 26 years on Tuesday. This dramatic drop occurred after the Dutch semiconductor company unintentionally published its third-quarter earnings report a day earlier than planned. The prematurely released report disclosed a 53% drop in bookings, which was significantly below Wall Street analysts' average predictions.

CEO's Apology for Early Release of Earnings Report

During ASML's earnings call, CEO Christophe Fouquet expressed his apologies to investors for the confusion caused on Tuesday, attributing the premature earnings release to a "technical error."

Reduced Guidance for 2025

The earnings call was dominated by ASML's less than stellar earnings report and outlook. CFO Roger Dassen informed investors about the reduced guidance for 2025, which is expected to fall in the lower half of the projected range of between 30 billion euros and 35 billion euros.

Third-Quarter Breakdown

The third-quarter breakdown, provided by Bloomberg, is as follows:

• Bookings EU2.63 billion, -53% q/q, estimate EU5.39 billion (Bloomberg Consensus)
• Net sales EU7.47 billion, +20% q/q, estimate EU7.17 billion
• Gross margin 50.8% vs. 51.5% q/q, estimate 50.7%
• Net income EU2.08 billion, +32% q/q, estimate EU1.91 billion
• Cash and other EU4.99 billion, -0.7% q/q, estimate EU4.86 billion

ASML's Revised 2025 Forecast

ASML cut its 2025 net sales and gross margin guidance due to diminishing demand for AI. The fourth quarter forecast includes net sales of EU8.8 billion to EU9.2 billion, with a gross margin of 49% to 50%. The 2025 forecast sees net sales of EU28 billion and a gross margin of 51% to 53%.

Slow Chip Market Recovery

CEO Fouquet highlighted that the sluggish recovery of the chip market is likely to extend "well into 2025." He noted that slow demand recovery has led to "customer cautiousness and some pushouts in their investments."

Delayed Demand for EUV Lithography Machines

This gloomy outlook is attributed to the delayed demand for ASML's EUV lithography machines, essential for manufacturing the world's most advanced chips. This bleak outlook persists despite the CEO's assertion that the AI boom, energy transition, and electrification trends continue.

ASML's Lithography Machines and AI Chips

ASML's lithography machines are produced for companies like Samsung Electronics and Taiwan Semiconductor Manufacturing, which manufacture AI chips for Apple and Nvidia. Signs of troubles at ASML may suggest the approach of storm clouds for the AI bubble.

ASML Shares Plunge in European Markets

In European markets, ASML shares plummeted 16% on Tuesday — the most significant drop since 1998. On Wednesday, shares continued to leak lower, falling by 5%.

Global Impact of ASML's Slide

ASML's slide has sent shockwaves through global semiconductor and tech stocks this week. In the US, this has resulted in a loss of more than $420 billion of market value for an index of US-traded chip stocks.

Bottom Line

The issues faced by ASML may be indicative of more significant problems on the horizon for the AI bubble. This incident serves as a reminder of the volatility and unpredictability of the tech market. What are your thoughts on this matter? Do you think this could be a sign of an impending burst of the AI bubble? Feel free to share this article with your friends and join the conversation. Don't forget to sign up for the Daily Briefing, delivered to your inbox every day at 6pm.