ASML Reports Strong Earnings, CEO Downplays AI Chip Concerns

ASML (ASML) shares soared in premarket trading following the release of the Dutch semiconductor equipment company's Q4 earnings that exceeded expectations. CEO Christophe Fouquet dismissed concerns that recent advancements by DeepSeek would negatively impact demand for AI chips.

ASML, the inventor of the technology used to create the most advanced AI chips, is the sole manufacturer of the machines that utilize its EUV lithography technology, costing nearly $400 million each. Chip manufacturers such as TSMC, Nvidia, Apple, and others purchase these machines from ASML to produce their chips.

According to Bloomberg estimates, ASML's Q4 earnings per share were €6.85, surpassing the expected €6.68, while quarterly revenue reached €9.2 billion, exceeding the €9 billion forecast. Additionally, the company's revenue guidance for Q1 2025 is ahead of consensus estimates, with a range of €7.5 billion to €8.0 billion surpassing the €7.2 billion estimate.

"Consistent with our view from the last quarter, the growth in artificial intelligence is the key driver for growth in our industry," said CEO Fouquet in a statement. "It has created a shift in the market dynamics that is not benefiting all of our customers equally, which creates both opportunities and risks as reflected in our 2025 revenue range."

ASML's earnings were closely watched after its previous quarterly results fell short of expectations, causing its stock and those of other chipmakers to decline.

However, Fouquet downplayed concerns regarding China's access to advanced semiconductors during an interview with CNBC, stating that "a lower cost of AI could mean more applications" and "more demand over time." He views the advancements as an opportunity for increased chip demand.

ASML's revenue from China has surged in recent years, reaching €9 billion in 2024 compared to €6.4 billion the previous year. Despite restrictions on the export of EUV lithography machines to China, ASML has seen increased sales of other equipment in the region.