Byte #14 – Revisiting ASML After Q2 Earnings
his week’s byte is a follow-up to Byte #10, where I first discussed ASML Holdings N.V. (“ASML”).
ASML reported its Q2 2025 earnings on July 16, and since then, the stock has been on a steady decline. Let’s unpack the key facts and what might be driving this pullback.
The company posted solid results:
23% YoY revenue growth
47% YoY EPS growth
Strong net bookings of €5.54B (+40.9% QoQ / flat YoY)
Management reaffirmed its guidance for full-year 2025 total net sales growth of around 15% YoY
However, they withheld any growth forecast for 2026, citing macroeconomic and geopolitical uncertainties—triggering investor caution and the subsequent sell-off.
So, why am I bringing this up again?
Because I want to walk you through how I’m thinking about this and hopefully help you shape your own strategy—whether you're already invested or just considering ASML.
There’s no question about ASML’s long-term potential. Demand for AI, strong fundamentals, and a currently discounted valuation support the bull case. But the contrast between ASML and other AI-driven names like Nvidia (NVDA) and Taiwan Semiconductor (TSMC) is worth noting. While NVDA designs and TSMC manufactures AI chips, ASML builds the equipment (like EUV lithography machines) used to make those chips. Yet, despite booming AI demand, ASML’s forward guidance disappointed.
Here’s what some analysts are saying—many are now placing the stock on “HOLD” until more clarity emerges:
Current sales trends suggest ASML may be exiting its expansion cycle—but it's unclear if a downturn is next.
AI demand remains strong, but it’s uncertain how many of ASML’s high-end machines will be needed in the near term.
Despite capacity expansion, Intel and Samsung are pausing or slowing capex, leaving TSMC as ASML’s main near-term hope.
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My two cents:
I have a fixed pool of capital and didn’t want it tied up in ASML while near-term uncertainty remains. While I remain confident in the company’s long-term potential, I believe the prudent move for now is to hold. I exited my position at breakeven—guided by my capital allocation principles and the importance of having an exit strategy—and will consider re-entry if the stock dips to $650–$700, offering good risk/reward, technical support, and long-term exposure despite some near-term risks.
As always, I’m sharing this to be fully transparent about how I think—and I hope this gave you a helpful lens through which to assess ASML’s long-term potential.
Thanks for reading, and I’d love to hear your thoughts!
