ASML Sell-Off Sparks Concerns for Nvidia and Broadcom Amid Geopolitical Risks.

ASML stock has fallen 21% over the past year, impacting chip manufacturers Nvidia and Broadcom. The company's advanced lithography machines are crucial for AI development. While ASML's solid Q2 results and 2030 targets are encouraging, geopolitical challenges and macroeconomic headwinds are affecting its customers and spending. Tariffs on imports and a complex supply chain also impact ASML. Approaching the sector with a long-term mindset can help endure volatility.

ASML Holding's stock has fallen by 21% over the past year, impacting chip manufacturers Nvidia and Broadcom. The company's advanced lithography machines are crucial for AI development, but geopolitical challenges and macroeconomic headwinds are affecting its customers and spending. Tariffs on imports and a complex supply chain also pose significant challenges for ASML.

Despite solid Q2 results and reaffirmed 2030 targets, ASML's outlook for 2026 remains uncertain due to geopolitical risks and macroeconomic headwinds. The company cited challenges such as tariffs on imports to its U.S. manufacturing centers and field operations, as well as the inability to sell its most advanced systems to China due to trade restrictions [2].

ASML's near-term results and 2030 targets are not the primary issue, but rather the murky medium-term outlook. The company's complex supply chain, which involves sourcing components from around the world, is vulnerable to tariffs. Although ASML is a Dutch company, the Netherlands works closely with the U.S. on trade policy, limiting ASML's ability to sell products to China [2].

ASML's warning of an impending slowdown does not necessarily mean the same for Nvidia and Broadcom, which operate upstream in the AI value chain. However, if fabs (the fabricators) slow down their investment, it could lead to a backlog buildup, which could delay shipments for chip designers [2].

Approaching the sector with a long-term mindset can help endure volatility. The best way to approach any chip stock, especially ones with expensive valuations like Nvidia and Broadcom, is to take a long-term view, preferably at least three to five years. If you believe in the long-term growth of global connectivity and AI and that Nvidia and Broadcom will remain industry leaders, then both stocks are probably worth buying and holding [2].

References:
[1] https://www.moomoo.com/news/post/88676221/record-tr4cking-news-default
[2] https://finance.yahoo.com/news/does-asml-stock-sell-off-222900335.html
[3] https://www.ainvest.com/news/asml-q2-earnings-disappoint-set-growth-2026-2507/