“Insane Demand”? ASML Pukes After Dismal Third Quarter Results, Forecast Slashed 

ASML Holding (ASML) shares plunged Tuesday morning after third-quarter bookings missed average analyst estimates and forecasts were slashed. Nasdaq puked on this news as the whole AI ‘insane demand’ narrative unravels.  

but… but… “insane demand”… https://t.co/47a6Mxmgh0

— zerohedge (@zerohedge) October 15, 2024

The Dutch company that makes the chip-making machines used by major players in the semiconductor industry reported dismal third results. 

*ASML SHARES DROP 11% AFTER 3Q BOOKINGS MISS ESTIMATES
*ASML CUTS 2025 NET SALES, GROSS MARGIN GUIDANCE https://t.co/4LoQXbQKIP

— zerohedge (@zerohedge) October 15, 2024

Here’s the breakdown of the third-quarter (courtesy of Bloomberg):  

Bookings EU2.63 billion, -53% q/q, estimate EU5.39 billion (Bloomberg Consensus)
Net sales EU7.47 billion, +20% q/q, estimate EU7.17 billion
Gross margin 50.8% vs. 51.5% q/q, estimate 50.7%
Net income EU2.08 billion, +32% q/q, estimate EU1.91 billion
Cash and other EU4.99 billion, -0.7% q/q, estimate EU4.86 billion

ASML slashed 2025 net sales and gross margin guidance as demand for AI wanes. 

Fourth quarter forecast:

Sees net sales EU8.8 billion to EU9.2 billion, estimate EU8.95 billion
Sees gross margin 49% to 50%, estimate 50.5%

2025 forecast: 

Sees net sales EU28 billion, estimate EU27.71 billion 2025 YEAR FORECAST
Sees gross margin 51% to 53%, saw about 54% to 56%, estimate 53.9%
Sees net sales EU30 billion to EU35 billion, saw about EU30 billion to EU40 billion, estimate EU35.94 billion

“While there continue to be strong developments and upside potential in AI, other market segments are taking longer to recover. It now appears the recovery is more gradual than previously expected. This is expected to continue in 2025, which is leading to customer cautiousness,” President and CEO Christophe Fouquet wrote in a statement. 

ASML shares were hammered in NY, down -16%. Bloomberg says this is the largest intraday plunge since 2008. 

Nasdaq puked as well. 

It was only a little more than a month ago when NVDA CEO Jensen Huang presented at the Goldman Tech conference in San Fran that “demand on [chips] is so great, and everyone wants to be first and everyone wants to be most.” He added, “We probably have more emotional customers today. Deservedly so. It’s tense. We’re trying to do the best we can.”

The Philadelphia semiconductor index fell nearly 5%, the most in more than a month, led by ASML ADRs, which tumbled as much as 16%

NVDA shares reversed following ASML’s third-quarter results…

ASML’s dismal ER and outlook cut provide some insight into the health of the AI sector – and may suggest the bubble wanes amid the impact of trade restrictions on exports to China. 

*Developing…