ASML stock drops as Dutch chipmaking giant faces uncertain future

ASML stock plummeted 6.5% during the European markets’ open trading session, hitting $823 at the time of publication. The company argued that the drop stemmed from its warning Wednesday of economic growth uncertainty in 2026.

Ben Barringer, global technology analyst at Quilter Cheviot, acknowledged that the economic hurdles facing Intel and Samsung could pose a hurdle in ASML’s economic outlook. He noted that the tech companies, both ASML customers, face financial challenges after reporting the first drop in profits in two years. 

ASML records positive Q2 results despite uncertain economic outlook

BREAKING: $ASML reports €7.7 billion total net sales and €2.3 billion net income in Q2 2025.

Full-year 2025 expected total net sales growth of around 15% with gross margin around 52%. https://t.co/5YumM2isbz

— ASML (@ASMLcompany) July 16, 2025

The Dutch chip-making equipment company reported 7.7 billion euros in net sales for the second quarter of 2025, and 2.3 billion euros in net income. The firm also maintained a positive outlook for the rest of the year, estimating revenue of between 7.4 billion euros and 7.9 billion euros in the third quarter.

Despite market expectations for Q3 being 8.3 billion euros, the firm said it expects a gross margin of between 50% and 52%. At the beginning of Q1, the company forecasted that its 2025 revenue would reach between 30 billion euros and 35 billion euros.

“Looking at 2026, we see that our AI customers’ fundamentals remain strong. At the same time, we continue to see increasing uncertainty driven by macroeconomic and geopolitical developments. Therefore, while we still prepare for growth in 2026, we cannot confirm at this stage.”

–Christopher Fouquet, President and CEO of ASML.

In its Q2 forecast in April, the Dutch tech giant revealed that it expected sales to reach between 7.2 billion euros and 7.7 billion euros. The company’s chief financial officer, Roger Dassen, argued that the forecast was due to income generated from its upgraded deployed machines. 

LSEG also estimated that the firm will hit 4.19 billion euros in net bookings during the previous quarter. The Veldhoven, Netherlands-headquartered company surpassed market forecasts and gained 5.5 billion euros in net bookings over the April-June stretch.

Chief investment officer at investment firm Aureus Han Dieperink remained unfazed about next year’s economic outlook, arguing that the previous quarter depicted strong demand. If ASML’s uncertain outlook for 2026 materializes, it will become the first year in over a decade since 2021 for the firm to record interrupted revenue growth.

Trump’s tariffs cause concern for ASML’s economic projections

In April, the semiconductor equipment firm acknowledged that demand for its chipmaking machines was deteriorating due to uncertainty from the U.S. tariffs Trump imposed. Fouquet argued that artificial intelligence remained a key driver for the company, but also expected uncertainty surrounding the tariffs to lower ASML’s full-year revenue guidance.

ASML’s CEO said U.S. levies created uncertainty due to macroeconomic and geopolitical considerations around the market demand for the firm’s semiconductor product. Trump exempted semiconductors from the tariffs, but it remains uncertain if chipmaking machines will receive the same consideration. 

Barringer argued that uncertainty from China and memory capex uncertainty are more likely to impact ASML’s orders. AMLS’s rival, Nvidia, announced Tuesday it commenced the sale of its H20 AI chip to China after Trump eased his export restrictions. The U.S. banned the sale of chips to Beijing in April from companies including ASML and Nvidia, but there’s still no directive from the Dutch government to amend the order. 

The tech analyst added that the challenges are a mere speed bump, and the Dutch company’s big backlog could help it pull through its growth. Dassen also acknowledged that the impact of tariffs is still uncertain, but the company’s supply chain is working to mitigate any impact. Demand for chips in China also represents nearly a third of all machine sales in the last three quarters.

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