Why institution analysts said ASML off-target is just a start of quantum sector crash?

``` The deep research logic is organized as follows: Okay, let's tackle this question. The user is asking why institutional analysts believe ASML's off-target guidance is just the start of a quantum sector crash. First, I need to understand the key points from the references provided. Looking at the references, ASML's recent earnings report (References 1, 2, 4, 11, 16) shows mixed results with a drop in stock price due to lower-than-expected Q2 guidance and concerns about tariffs affecting customer spending. The company maintains its long-term outlook but faces near-term challenges. Deutsche Bank downgraded the stock target (Reference 3) but still maintains a Buy rating, citing strong fundamentals and cash flows. However, they mention risks from geopolitical tensions and potential new restrictions on Chinese semiconductor companies. Now, connecting this to the quantum sector crash. References 6, 7, 8, 9, 10, 20-23 discuss the volatility in quantum computing stocks, driven by skepticism from figures like Nvidia's CEO (References 7, 8, 9, 10), concerns about valuations, and the experimental nature of the technology. The quantum sector is facing a sell-off due to doubts about its commercial viability in the near term. The user's question links ASML's off-target guidance to the start of a quantum crash. How are these connected? ASML is a leader in semiconductor equipment, particularly in EUV lithography, which is crucial for manufacturing advanced chips. Quantum computing requires specialized semiconductor technology, so any disruption in the semiconductor sector could affect quantum computing companies. If ASML's guidance misses expectations, it might indicate broader issues in the semiconductor industry, which in turn could impact the quantum sector's ability to develop and scale their technologies. Additionally, institutional analysts might be concerned that the same macroeconomic factors affecting ASML—like tariffs, geopolitical tensions, and uncertain demand—could also hinder quantum computing companies. These factors could lead to reduced capital expenditures in the semiconductor equipment needed for quantum chips, creating a ripple effect. The user's profile shows interest in the NASDAQ Composite, which includes both ASML and quantum computing stocks. The short to medium-term investment horizon means analysts are focusing on near-term risks. The quantum sector's reliance on cutting-edge semiconductor technology means any slowdown in ASML's performance could signal a broader industry challenge, leading to a potential crash in quantum stocks. Putting this together, the analysts likely see ASML's off-target guidance as a symptom of underlying issues in the semiconductor industry that will negatively impact the quantum sector. Factors like reduced investments, supply chain disruptions, and geopolitical uncertainties are expected to exacerbate the quantum sector's vulnerabilities, leading to a crash that ASML's guidance merely previews. ``` **Concluding Statement:** Institutional analysts argue that ASML’s off-target guidance signals systemic risks in the quantum sector, driven by macroeconomic headwinds, geopolitical tensions, and overvaluation concerns. Below is the detailed analysis: --- ### **1. ASML’s Off-Target Guidance: A Microcosm of Broader Semiconductor Challenges** ASML’s Q1 2025 revenue of €7.74 billion ($8.81 billion) slightly missed forecasts, and its Q2 guidance of €7.2–7.7 billion fell short of expectations . This reflects: - **Tariff Uncertainty**: U.S. tariffs on Chinese goods (now at 245%) and potential export restrictions on Chinese semiconductor firms (e.g., CXMT, YMTC) have dampened customer spending plans . - **Geopolitical Risks**: ASML’s 49% revenue exposure to China and its critical role in EUV lithography (essential for advanced chip production) make it vulnerable to U.S.-China trade tensions . --- ### **2. Quantum Sector Vulnerabilities Exacerbated by ASML’s Weakness** The quantum computing sector is facing a perfect storm of risks: - **Valuation Concerns**: Quantum stocks (e.g., Rigetti Computing, D-Wave Quantum) have plummeted due to skepticism about near-term commercial viability. For example, Rigetti fell 11% and D-Wave dropped 18% after Nvidia CEO Jensen Huang questioned the sector’s timeline . - **Technology Readiness**: Quantum computing remains in an experimental phase, with most companies lacking scalable revenue models. Even leaders like IonQ and Quantum Computing Inc. face质疑 about their ability to deliver "useful" quantum systems within 15–20 years . - **Semiconductor Equipment Dependency**: Quantum chip manufacturing requires advanced lithography systems (ASML’s core product). A slowdown in ASML’s order backlog (down 6.5% post-earnings ) directly impacts quantum firms’ ability to scale production . --- ### **3. Institutional Sentiment: ASML’s Guidance as a Canary in the Coal Mine** Analysts link ASML’s off-target guidance to quantum sector risks because: - **Capital Expenditure (Capex) Trends**: The global semiconductor equipment market grew 10% in 2024 , but 2025 projections now face downward revisions due to macroeconomic uncertainty. This aligns with quantum firms’ struggles to secure consistent funding . - **Geopolitical Alignment**: Both ASML and quantum companies rely on cross-border supply chains. U.S. export controls and tariffs create a "double whammy" effect, reducing liquidity for both sectors . - **Market Timing**: The quantum sector’s 2023–2024 rally (e.g., Rigetti +700%, Quantum Computing +1,500%) now faces a reckoning as investors reassess valuations against slowing semiconductor Capex . --- ### **4. Implications for Investors** - **Short-Term Volatility**: The NASDAQ Composite’s tech-heavy composition (where ASML and quantum stocks trade) will likely experience continued swings as investors digest tariff impacts and quantum sector corrections . - **Long-Term Opportunity**: Analysts like Deutsche Bank maintain a "Buy" rating on ASML, citing its €44–60 billion 2030 sales forecast and undervaluation (GF Value: $862.93 vs. current $634.93 ). Similarly, quantum firms with strong R&D (e.g., Quantum Computing’s $2M R&D spend ) could emerge as leaders if they navigate the current downturn . --- ### **Conclusion** ASML’s off-target guidance is not just a semiconductor-specific issue but a harbinger of broader risks in the quantum sector. Institutional analysts view this as a "double-edged sword": while near-term volatility is inevitable, companies with robust balance sheets and technological differentiation (like ASML and select quantum firms) are positioned to thrive in the long run. Investors with a medium-term horizon should monitor tariff developments and quantum sector R&D milestones closely.