ASML Slips Ahead of Q4 Results As Investors Seek Clarity on Chip Demand Recovery: Retail Remains Cautiously Optimistic

U.S.-listed shares of ASML Holding NV (ASML) fell over 1% in mid-day trading Tuesday, extending their losing streak, ahead of the chipmaker's fourth-quarter earnings release scheduled for Wednesday after the market close.

The stock has dropped more than 10% over the past four sessions, including a 7% decline on Monday that wiped out over $15 billion in market value. 

Monday’s selloff followed an announcement by Chinese AI company DeepSeek, which unveiled artificial intelligence models that rely on less advanced chips, raising concerns about diminished demand for ASML’s high-performance semiconductor manufacturing equipment.

Wall Street expects ASML to report earnings per share (EPS) of $7.07 on revenue of $9.5 billion for the quarter. The estimate marks a 25% year-over-year increase in revenue, according to Koyfin data. 

Analysts also project a 21% rise in gross profit to $4.7 billion and a nearly 30% increase in net profit to $2.7 billion.

Bernstein raised its price target on ASML to $887 from $767, maintaining its "Outperform" rating ahead of the company’s earnings, according to TheFly. 

The brokerage anticipates Q4 and full-year 2024 results to align closely with ASML’s earlier guidance, driven by strong demand for extreme ultraviolet (EUV) lithography systems and steady demand from China.

ASML is the only manufacturer of EUV machines, a critical component for producing cutting-edge semiconductor chips.

Bernstein highlighted that investor focus is shifting to bookings and guidance for 2025 as geopolitical challenges, U.S. export restrictions, and reduced forecasts weigh on sentiment. 

ASML Sentiment and Message Volume on Jan.28 as of 1:15 p.m. ET | Source: Stocktwits

On Stocktwits, retail sentiment dipped to ‘bullish’ from ‘extremely bullish’ a day ago while message volumes remained at ‘extremely high’ levels.

The stock has seen a 14.95% increase in watchers on the platform over the past three months.

Retail investors appear divided. Some remain optimistic about sustained chip demand, driven by AI advancements, while others are more cautious, with some trimming exposure to AI-linked stocks amid heightened volatility.

ASML’s stock took a hit in October 2024 after leaked earnings revealed a reduced 2025 sales forecast, citing slower semiconductor recovery. 

The company now projects 2025 sales between $31 billion and $36 billion.

ASML’s challenges mirror broader pressures in the semiconductor industry. Peers like Texas Instruments (TXN) recently reported a 1.7% decline in quarterly revenue, though it beat analyst estimates by 3.5%.

ASML’s stock is down 6% so far in 2025.

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