ASML's stock price is dropping today after the semiconductor giant issued this critical warning about 2026

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17-07-2025

One of the most critical companies in the chipmaking industry is seeing its stock price drop precipitously today.
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Dutch semiconductor company ASML Holding N.V. (Nasdaq: ASML) reported its second-quarter 2025 results, beating on its most critical metrics, but its stock price is still declining in premarket trading. The reason? Executives made comments about its upcoming 2026 fiscal year that have investors concerned. Here's what you need to know.
The most important non-chip company in the chip industry
ASML Holding N.V. is headquartered in Veldhoven, Netherlands, and is arguably the most important technology company within Europe's borders. Given that ASML is critical to the world's chipmaking supply chain, the company is also one of the most important tech giants in the world.
ASML is not a chipmaker itself. However, it produced the machines that make the chips inside your devices. These machines are known as extreme ultraviolet lithography (EUV) photolithography machines, and they use light to etch patterns into the silicon wafers used in chipmaking.
While the world has several photolithography machine companies, ASML is the world's only maker of EUV photolithography machines. EUV technology is critical in the world's most advanced chips, including those made by Apple for its Apple Silicon chips and the chips produced by Nvidia, which are crucial for artificial intelligence servers.
ASML's customers include Nvidia and TSMC, the maker of Apple's chips. The Dutch company sells its EUV machines to these companies, enabling them to produce their own chips. As noted by CNBC, ASML's most advanced photolithography machines can be the size of a double-decker bus and cost as much as $400 million each.
Without ASML's machines, the world's semiconductor manufacturing capability grinds to a halt.
ASML beats, but 2026 comments worry investors
Thanks to the rise of artificial intelligence, chipmakers are pumping out more advanced chips than ever—chips that require the EUV photolithography machines that ASML offers. Given that, it's little surprise that ASML exceeded investor expectations in its most recent financial quarter.
Today, the company announced its Q2 2025 results, in which it reported:
€7.7 billion (about $8.9 billion) in net sales
€2.3 billion (about $2.6 billion) in net income
Gross margin of 53.7%
Earnings per share of €5.90 (about $6.85)
To put those net sales and net income figures into greater perspective, CNBC notes that analysts were expecting net sales of €7.52 billion (about $8.7 billion) and net income of €2.04 billion (about $2.3 billion).
In other words, ASML handily beat expectations.
The company also reported net bookings—a metric that indicates customer demand—of €5.5 billion (about $6.3 billion), of which €2.3 billion (about $2.6 billion) is for its most advanced EUV photolithography machines. Analysts had been expecting net bookings of €4.19 billion (about $4.8 billion).
Why is ASML stock falling?
However, despite the welcomed Q2 results, ASML's stock price has plunged in premarket trading after the company announced its latest financials. That fall has to do with two main factors.
First, ASML's Q3 forecast disappointed investors. The company said it expects to post total net sales of between €7.4 billion (about $8.6 billion) and €7.9 billion. It also expects its gross margin to be between 50% and 52% for the period. The company also said it expects its full fiscal 2025 total net sales to equate to an increase of 15%.
As noted by CNBC, analysts had been expecting Q3 net sales to be around €8.3 billion (about $9.1 billion). ASML's 15% growth forecast for full-year sales was also lower than what it had previously forecast.
However, the second factor may be the primary reason for ASML's share price decline this morning—comments made by ASML executives regarding its 2026 outlook.
Announcing its Q2 results, ASML CEO Christophe Fouquet touched on expectations for 2026.
'Looking at 2026, we see that our AI customers' fundamentals remain strong,' Fouquet said. 'At the same time, we continue to see increasing uncertainty driven by macro-economic and geopolitical developments. Therefore, while we still prepare for growth in 2026, we cannot confirm it at this stage.'
In other words, ASML's CEO is admitting he does not know if the company will grow in 2026. His comments suggest that the main uncertainty surrounding its growth potential are related to President Trump's tariffs.
ASML is a foreign company that sells a significant amount to American companies, yet it does not have widespread operations in America, making it a potential target for retaliation from Trump and his goal to bring manufacturing back to the United States.
Fouquet did not say there would not be growth, but given the tariff uncertainty, he seems to feel it's more prudent to prepare investors for that possibility.
But that's a cautionary message investors have not taken well.
As of the time of this writing, ASML shares are down over 7% in premarket trading to $764 per share. Yesterday, shares had closed above $823. As of yesterday's close, ASML shares were up over 18% since the beginning of the year.
This post originally appeared at fastcompany.comSubscribe to get the Fast Company newsletter: http://fastcompany.com/newsletters