What You Need To Know
ASML's fourth-quarter financial results exceeded expectations, with net sales of €9.26 billion and net profits of €2.69 billion. The company reported a remarkable increase in net bookings, reaching €7.09 billion, significantly surpassing analysts' estimates. ASML’s order backlog stands at €36 billion for 2024, while sales projections for 2025 remain steady at €30 billion to €35 billion.
The company's shares experienced a notable increase, rising 11% intraday before closing with a 9.6% gain at €646.60. Analysts, such as those at Morningstar, suggest that ASML's shares should be valued at approximately €850, indicating potential growth in the stock's value.
Despite initial market challenges due to competitive pressures in AI chip demand, ASML’s extreme ultraviolet lithography tools are crucial, contributing €3 billion to bookings in Q4. Going forward, ASML's CEO anticipates an increase in semiconductor demand driven by lower AI costs, although the company warns of weaker demand from China in 2025 due to prior U.S. export restrictions. Analysts express confidence in ASML's market position despite prevailing uncertainties in the AI space.
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Why This Is Important for Retail Investors
Signals Strong Semiconductor Demand – Net bookings surged 169%, and revenue beat expectations, reinforcing confidence in the industry’s expansion.
AI Market Resilience – Despite concerns over cheaper AI models, ASML’s CEO expects continued semiconductor demand driven by AI expansion.
EUV Machines Drive Revenue – ASML’s most advanced chipmaking tools contributed €3 billion in Q4 bookings, showing sustained demand for cutting-edge semiconductor manufacturing.
Reduced China Risk – ASML expects a more balanced global demand, lowering reliance on China and reducing geopolitical exposure.
Key AI & Tech Investment – ASML remains a crucial player in AI, cloud computing, and semiconductor production, making it a strategic long-term investment.