Semiconductor Stocks Fall Amid Cautious Outlook from ASML and Geopolitical Uncertainty

Several semiconductor stocks, including Penguin Solutions, Monolithic Power Systems, Impinj, Lattice Semiconductor, and Himax, fell after ASML warned it could no longer guarantee growth in 2026 due to "macro-economic and geopolitical developments." The warning sent a chill through the market, sparking concerns about trade tensions disrupting the semiconductor supply chain and slowing down investment from chip manufacturers.

ASML Holding, the world's largest supplier of chip-making equipment, has warned that it may not achieve growth in 2026 due to uncertainty surrounding US tariffs. The company's CFO, Roger Dassen, stated that chipmakers in the US are delaying investments until clarity on the tariff impact is reached. Shares in ASML fell 7.8% on the news, dragging peers lower. The company's net bookings were 25% ahead of consensus estimates [1].

ASML reported second-quarter earnings that beat estimates, with its key net bookings figure ahead of consensus. However, the chip equipment giant missed analyst expectations for revenue guidance in the current quarter and warned of the possibility of no growth ahead. Here's how ASML did versus LSEG consensus estimates for the second quarter:

- Net sales: €7.7 billion ($8.95 billion) versus €7.52 billion euros expected
- Net profit: €2.29 billion vs €2.04 billion euros expected

The company's CFO, Roger Dassen, attributed the beat to revenue from upgrading currently deployed machines as well as tariffs having a "less negative" impact than anticipated. Analysts anticipated net bookings— a key indicator of order demand — would come in at €4.19 billion euros over the April-June stretch. ASML reported net bookings of €5.5 billion euros [2].

ASML is one of the most important semiconductor supply chain companies in the world. It makes extreme ultraviolet lithography (EUV) machines, which are required to manufacture the most advanced chips in the world, such as those designed by Apple and Nvidia. Companies like Intel and Taiwan Semiconductor Manufacturing Co. are customers of ASML.

The company forecast third-quarter revenue of between €7.4 billion euros and €7.9 billion euros, which was shy of market expectations of €8.3 billion euros. ASML said it expects full-year 2025 net sales to grow 15%, narrowing its guidance from a previously announced forecasts of between €30 billion euros to €35 billion euros [3].

However, the Dutch tech giant was less certain about the outlook for 2026. "Looking at 2026, we see that our AI customers' fundamentals remain strong," ASML CEO Christophe Fouquet said in a statement. "At the same time, we continue to see increasing uncertainty driven by macro-economic and geopolitical developments. Therefore, while we still prepare for growth in 2026, we cannot confirm it at this stage."

The Veldhoven, Netherlands-headquartered company has released its next generation EUV tools known as High NA, which stands for high numerical aperture. These machines, which are larger than a double-decker bus and can cost more than $400 million each, are key to ASML's future growth plans.

ASML's warnings come amid increasing uncertainty from President Trump's tariffs. The chip industry has been seeking clarity for months as the Trump administration conducts an investigation under Section 232 of the Trade Expansion Act of 1962, which could result in specific tariffs for semiconductors. ASML sells chip-making machinery to U.S. clients like Intel [1].

The company has benefited from the artificial-intelligence boom, but demand for machines that make less sophisticated chips found in cars and smartphones has been more sluggish in recent months. Fouquet said AI fundamentals remained strong even when looking at 2026 [2].

ASML reported sales of €7.69 billion for the second quarter, up from €6.24 billion euros a year earlier. The figure is above analysts' forecasts and at the top of company guidance. Net profit grew to €2.29 billion euros from €1.58 billion euros a year earlier, beating market expectations. Gross profit—a closely watched metric for companies operating in the semiconductor industry—came in at €4.13 billion euros, generating a 53.7% margin that beat both consensus and company guidance [3].

For the current quarter, the company expects sales between €7.4 billion euros and €7.9 billion euros, with a gross margin between 50% and 52% [3].

Several semiconductor stocks, including Penguin Solutions, Monolithic Power Systems, Impinj, Lattice Semiconductor, and Himax, fell after ASML warned it could no longer guarantee growth in 2026 due to "macro-economic and geopolitical developments." The warning sent a chill through the market, sparking concerns about trade tensions disrupting the semiconductor supply chain and slowing down investment from chip manufacturers [1].

References:
- [1] https://www.ainvest.com/news/asml-warns-uncertainty-2026-growth-tariff-uncertainty-2507/
- [2] https://www.ainvest.com/news/tariff-tectonic-shift-asml-guidance-cut-signals-era-semiconductor-supply-chains-2507/
- [3] https://finance.yahoo.com/news/dutch-tech-giant-asml-sees-054238739.html