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ASML (ASML.US) Falls From "Throne" SAP (SAP.US) Becomes Europe's Most Valuable Tech Company

AInvestWednesday, Oct 16, 2024 8:20 am ET
1min read

Noting that ASML's (ASML.US) stock price has plunged as its earnings expectations were lowered, the European most valuable tech company has been replaced by software company SAP (SAP.US) as its European most valuable tech company.

ASML's stock price has plunged by 16%, its biggest drop in 26 years, as investors were shocked by its earnings guidance cut on Tuesday, wiping out over 60 billion euros (US$65.3 billion) of its market value. The company's orders in the third quarter were only about half of what analysts had expected.

ASML's 16% drop is one of the biggest single-day drops in Europe, similar to Nokia and Vodafone in the 2000s when the internet bubble burst.

Meanwhile, SAP's stock price has risen by 52% this year, benefiting from a significant increase in cloud computing revenue. Part of the growth is due to the growing demand for artificial intelligence applications. The last time ASML lagged behind SAP in terms of market value was in 2020.

SAP announced a restructuring plan this year as part of its efforts to integrate AI into its SAP software to help its enterprise customers improve efficiency. The company will report its third-quarter earnings on Monday next week.

As of writing, SAP's stock price rose 1.1% to 212.15 euros, valuing the company at 261 billion euros.

Since hitting a record high in July, ASML's stock price has fallen by more than a third due to the possibility of more restrictions on its business in China and the overall weakness in the semiconductor industry. The index fell 5% on Wednesday.

Its customers, including Intel, which is cutting costs through restructuring, and memory chipmakers such as Samsung Electronics, are closely watching their spending.

ASML's orders plummet amid chip industry downturn

ASML's poor performance has been exacerbated by its mistake of releasing its financial results a day early, which has weakened its performance. ASML said in a statement that the early release of the financial results was due to a technical error. The company will hold a conference call with investors at 3:00 pm in Amsterdam on Wednesday.

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