ASML beats Q2 forecasts but warns of weak 2026 outlook, triggering $30 billion market value loss.
Sectors & Industries
July 17, 2025
Table of Contents
ASML Holding N.V., the Dutch powerhouse behind the world’s most advanced chipmaking machines, saw its shares fall 11.4% on July 16, 2025. The drop erased over $30 billion in market value, despite the company delivering better-than-expected Q2 results. What spooked investors wasn’t ASML’s current performance—but its inability to confirm growth for 2026.
While ASML remains one of the most critical companies in the global semiconductor and AI supply chain, its cautious guidance has triggered new questions about whether the AI chip boom is starting to lose steam or simply encountering turbulence.
ASML posted strong financials for the second quarter of 2025:
This performance was largely fueled by demand for ASML’s extreme ultraviolet (EUV) lithography machines, which are essential for manufacturing advanced chips used in AI data centers and smartphones.
Despite the strong quarter, ASML’s CEO Christophe Fouquet warned that the company could no longer confirm revenue growth in 2026. That cautious language marked a stark departure from his October 2024 remarks, when he projected growth continuing well into 2026 and beyond.
Fouquet pointed to “increasing uncertainty driven by macroeconomic and geopolitical developments” as the main reason. That vague but ominous phrasing was enough to send ASML shares tumbling to €630.70 its steepest drop since January 2025.
For a company as critical as ASML, a muted outlook signals broader industry weakness. ASML is the world’s exclusive supplier of EUV lithography machines, tools so essential that no advanced chip from Nvidia AI accelerators to Apple’s mobile processors—can be made without them. If chipmakers are pulling back on ASML orders, it could mean:
In fact, Barclays analysts highlighted that ASML’s backlog coverage for 2026 is at a three-year low. To hit its prior growth targets, the company would need to double its current order intake a tall order given 12–18 month lead times for its machines.
Several key issues are contributing to ASML’s cautious tone:
The Trump administration has floated new tariffs on European semiconductor equipment, which could directly impact ASML’s gross margins and delay customer orders in the U.S. CFO Roger Dassen noted that several U.S. clients are already holding off on spending until they see how the tariff situation plays out.
Although Nvidia and AMD recently secured permission to resume some AI chip sales to China, ASML hasn’t received similar relief. Chinese customers have been stockpiling older DUV tools, which helped boost ASML’s recent numbers but that may not continue if export restrictions tighten.
Chipmakers are still digesting billions in recent infrastructure investments. Issues like yield challenges at Intel and Samsung are creating hesitancy to commit to more ASML tools, especially its new High NA EUV machines priced north of $400 million each.
While AI chip demand remains strong, recovery in logic and memory segments has been slower. This divergence is putting pressure on semiconductor toolmakers like ASML to lean heavily on AI to sustain growth.
Despite the near-term headwinds, ASML’s strategic position hasn’t changed. The company remains:
Its High NA EUV systems (e.g., the EXE:5000) are being adopted by major customers like TSMC and Intel, providing a strong foundation for future growth.
The company also emphasized that AI demand continues to be a major driver of EUV system adoption. CFO Dassen noted that AI-related investments were a key factor behind the Q2 bookings beat.
Some market watchers believe the selloff may have been overdone. After all, ASML still guided for 15% full-year revenue growth in 2025 and is maintaining healthy margins above 50%. But for a stock often seen as a barometer for tech sector confidence, the lack of 2026 visibility sent the wrong signal at the wrong time.
In fact, this 11% drop closely mirrors the October 2024 selloff, when ASML shares fell 15.7% after a weaker 2025 outlook. That drop proved to be temporary as AI demand picked up—but investors remain cautious in the face of new policy threats and macroeconomic uncertainty.
ASML’s warning may not just reflect company-specific risks—it could be a canary in the coal mine. The semiconductor “supercycle” driven by AI is facing its first real test from:
While the AI segment remains resilient, broader chip demand may need more time to recover. ASML’s 12–18 month lead times mean today’s orders reflect sentiment deep into 2026—making its cautious tone all the more significant.
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