ASML Sees Stock Drop Despite Q2 Earnings Amid 23% Revenue Growth

ASML Holding NV reported a 23% YoY revenue growth in Q2 and projected strong Q3 sales. Despite a 7% drop in share price, the company reaffirms its growth targets for 2025. Analysts forecast a 19.71% potential upside, while GuruFocus estimates a 57.55% potential upside. ASML has a consensus "Outperform" rating with an average one-year price target of $879.40.

ASML Holding NV (ASML) has reported a robust financial performance for the second quarter, with net sales reaching €7.7 billion, marking a 23% year-over-year (YoY) increase [1]. The company's gross margin stood at 53.7%, which exceeded expectations driven by a thriving upgrade business and cost-saving one-offs. The company's net income for the quarter was €2.3 billion, with earnings per share (EPS) at €5.90.

ASML's quarterly net bookings totaled €5.5 billion, with €2.3 billion attributed to Extreme Ultraviolet (EUV) systems, reflecting strong demand in the semiconductor industry. The company's CEO, Christophe Fouquet, highlighted progress in lithography intensity, particularly in DRAM, and the introduction of the TWINSCAN NXE:3800E system, which contributed to the quarter's momentum.

Looking ahead, ASML expects third-quarter total net sales between €7.4 billion and €7.9 billion, with a gross margin ranging from 50% to 52%. The company anticipates research and development (R&D) expenses of around €1.2 billion and selling, general, and administrative (SG&A) costs of approximately €310 million for the quarter. For the full year 2025, ASML projects a 15% increase in total net sales, with a projected gross margin of around 52% [1].

Despite the positive performance, ASML's share price dropped by 7% following the announcement. However, the company remains optimistic about its growth prospects for 2025 and reaffirms its targets. Analysts forecast a 19.71% potential upside for ASML, while GuruFocus estimates a 57.55% potential upside. ASML holds a consensus "Outperform" rating with an average one-year price target of $879.40 [2].

The company's CEO, Christophe Fouquet, acknowledged increasing uncertainty due to macroeconomic and geopolitical developments, particularly regarding tariffs, which could impact the semiconductor supply chain. However, he expressed confidence in the company's AI customers' fundamentals, which are expected to drive growth in 2025 and 2026.

ASML's strong performance in Q2 underscores its leadership position in the semiconductor industry and its ability to navigate the challenges posed by geopolitical uncertainties and tariffs. The company's focus on EUV technology and AI-driven growth strategies position it well for future opportunities.

References:
[1] https://www.asml.com/en/news/press-releases/2025/q2-2025-financial-results
[2] https://www.gurufocus.com/news/2980099/asml-posts-strong-q2-revenue-as-new-systems-boost-momentum-asml-stock-news