Why ASML Stock Lost 17% in October

ASML Holding NV (ASML), a leading supplier of semiconductor equipment, experienced a significant stock price decline in October 2024, losing 17% of its value. This article explores the factors contributing to this downturn and assesses the long-term implications for the company and its investors.

ASML's third-quarter earnings report and guidance update sparked investor concerns, leading to a sell-off in the stock. The company reported revenue growth of 12% year-over-year (YoY) and earnings per share (EPS) growth of 9.8% YoY. However, new bookings in the quarter were only $2.6 billion, half of what analysts expected, reflecting weakness in China and a slower recovery in the investment cycle (Source: Number 1, URL: ). Management also cut its 2025 revenue guidance to €30-35 billion, down from the previous range of €30-40 billion, indicating a more gradual recovery than previously expected.


Market dynamics and sector-specific trends played a significant role in ASML's stock decline. The broader semiconductor sector experienced a downturn, with the PHLX Semiconductor Index (SOX) falling by 12% in the same month. Additionally, ASML's third-quarter earnings report revealed weaker-than-expected bookings and a cautious outlook for 2025, which contributed to investor concerns. The company's guidance for 2025 revenue was revised down, reflecting a slower recovery in demand and delayed EUV demand timing.


ASML's exposure to the AI and semiconductor industries influenced its stock price in October. While only a small portion of its revenue comes from AI-specific products, the company's performance is closely linked to the broader semiconductor industry. The slow recovery in Logic and Memory segments, along with competitive dynamics and capacity additions, led to customer cautiousness and weakened demand for ASML's lithography systems.

The potential long-term implications of ASML's stock loss for the company and its investors are mixed. Despite the short-term setbacks, ASML's long-term prospects remain strong. The company is the leading supplier of lithography equipment, with a monopoly on extreme ultraviolet lithography systems, which are crucial for manufacturing advanced semiconductor nodes. As the semiconductor industry continues to grow, driven by demand for AI, 5G, and other technologies, ASML is well-positioned to benefit. Moreover, ASML's strong balance sheet, with €4.985 billion in cash and short-term investments, provides a buffer against short-term market fluctuations.

In conclusion, ASML's stock price decline in October was primarily driven by a disappointing Q3 earnings report and weak guidance for 2025. The company's revenue growth slowed to 12%, and earnings per share increased by just 9.5%. New bookings in the quarter were only $2.6 billion, half of what analysts expected, reflecting weakness in China and a slower recovery in the investment cycle. Despite these short-term setbacks, ASML's long-term prospects remain strong, and investors who bought the stock during the recent dip may be well-rewarded as the company continues to drive advancements in semiconductor technology.