ASML's stock falls the most since 1998 after projecting sluggish 2025 sales, erasing €50B from its market cap and causing Nvidia and other chip stocks to fall
- Magnitude of ASML's forecast cut was a surprise, Citi says — Peer Tokyo Electron among worst hit stocks in Asia, down 10%
Context & Ripple Effects
ASML entered the forecast reset after a weak first quarter, when it reported lower sales, income and bookings in its Q1 results. Its importance to chip-industry capital spending made the guidance change a broader signal rather than an isolated company event.
The shock also followed a period in which China had become ASML’s largest market for four consecutive quarters, including a sharp rise in China sales in Q2. That customer concentration increases the market’s sensitivity to any change in expected equipment demand.
First-order effects
- ASML’s lower 2025 sales outlook immediately reprices its own earnings expectations, wiping roughly €50 billion from its market value.
- Nvidia and other semiconductor shares fall alongside ASML, while Tokyo Electron’s decline shows the read-through extends to equipment peers.
Second-order effects
- Investors are likely to reassess whether chipmakers’ planned capacity additions can sustain the equipment-demand assumptions embedded in supplier valuations.
- The selloff widens the gap between companies with near-term order visibility and those whose outlook depends on future fab spending, putting added pressure on equipment-sector multiples.
Third-order effects
- If repeated across suppliers, softer equipment guidance would reinforce a more uneven semiconductor investment cycle: AI-led demand can coexist with delayed or selective manufacturing-capacity spending.
- ASML’s China exposure suggests that the industry’s capital-equipment outlook may become increasingly shaped by the mix of regional customers and trade-policy constraints, not just aggregate chip demand.
The trend: This is a data point in the shift from broad semiconductor enthusiasm toward more selective, order-led assessment of AI and manufacturing-capacity spending.