ASML Surges on Better-than-Expected Earnings, Rejects AI Chip Demand Concerns
Premarket Surge
ASML (ASML) shares jumped 5% in premarket trading following strong fourth-quarter earnings and the CEO's dismissal of concerns over AI chip demand.
Financial Highlights
ASML reported:
* Earnings per share: €6.85 vs. €6.68 expected
* Quarterly revenue: €9.2 billion vs. €9 billion forecast
* 2025 first-quarter sales forecast: €7.5-8.0 billion vs. €7.2 billion consensus estimate
Artificial Intelligence Growth Driver
CEO Christophe Fouquet cited the growth in artificial intelligence as a primary catalyst for industry expansion. However, he acknowledged that not all customers are benefitting equally, creating both opportunities and risks.
Industry Scrutiny and Geopolitical Considerations
ASML's results have been closely examined after previous earnings fell short of expectations. The company faces pressure amidst export control measures from the Netherlands and the US aimed at limiting China's access to advanced semiconductors.
China Revenue and AI Concerns
ASML's revenue from China has risen significantly in recent years, reaching €9 billion in 2024. However, news of a cost-effective AI model from DeepSeek raised concerns about spending on AI infrastructure.
CEO Rebuttal
Fouquet downplayed the concerns, stating that a lower cost of AI could lead to increased applications and demand for chips.
Industry Leader in EUV Lithography
ASML remains the only manufacturer of the specialized machines that utilize its EUV lithography technology. These machines, priced at nearly $400 million, are vital for producing the world's most advanced AI chips.