ASML’s Fiscal Q4 net sales surged 169% as its most advanced tools saw strong demand. Shares of ASML surged in early European trade after the critical chipmaker reported strong quarterly bookings, seemingly defying worries about China’s cheaper alternatives. Shares surged as much as 11% as it posted better-than-expected bookings of €7.08 billion in its fiscal fourth quarter, thanks to strong demand for its most advanced chip-building tools.
This figure easily exceeded the €4 billion expected by analysts and marked an increase of 169% from the €2.63 billion reported in the third quarter. ASML achieved “another record year,” ending Fiscal Year 2024 with total net sales of €28.3 billion and a gross margin of 51.3%, noted CEO Christophe Fouquet. He stressed that “growth is the key driver for growth in our industry.
It has created a shift in the market dynamics that is not benefiting all of our customers equally.”
Shares of ASML had been caught up in the global tech rout on Monday, but the quarterly earnings report has helped recover sentiment.
Strong Q4 drives ASML shares higher
The performance of DeepSeek’s R1 model undercut assumptions about the spending by leading AI powers on processing units needed to train AI models.
It’s feared that this could hurt demand for ASML’s high-precision extreme ultraviolet (EUV) machines, which are used to create the most advanced chips. EUV tools made up €3 billion of net bookings for ASML in Q4. “The strong Q4 booking and backlog will dispel some of the bearish concerns regarding 2025 itself, though concerns on the 2026 growth are likely to persist,” Jefferies analysts said.
Looking ahead, ASML expects Fiscal Q1 2025 total net sales between €7.5 billion and €8.0 billion, and a gross margin between 52% and 53%. Total net sales in 2025 are forecast to be between €30 billion and €35 billion. The consensus rating on Wall Street is a Strong Buy for ASML stock, based on three Buy ratings in the last three months.
The target price of $868.33 implies a 27% upside potential.