ASML Surges 5% on Earnings Beat, CEO Dismisses AI Chip Demand Concerns

Dutch semiconductor equipment giant ASML (ASML) witnessed a 5% stock surge on Wednesday following the announcement of impressive Q4 earnings that surpassed market expectations.

ASML's solid financial performance was driven by strong demand for its EUV lithography machines, essential for manufacturing advanced AI chips. The company reported earnings per share of 6.85 euros, exceeding the consensus estimate of 6.68 euros. Quarterly revenue also outperformed expectations, reaching 9.2 billion euros against the anticipated 9 billion euros.

Record Orders and Revenue Forecast

ASML secured orders worth over 7 billion euros in Q4, double the estimated 3.5 billion euros. Notably, half of these orders stemmed from EUV machines for AI chip production. The company's Q1 2025 sales forecast also exceeded consensus estimates, with a projected range of 7.5 billion to 8 billion euros compared to the 7.2 billion euros anticipated.

CEO Predicts Growth Driven by AI

"Growth in artificial intelligence remains a primary industry growth driver," stated ASML CEO Christophe Fouquet. "This shift in market dynamics has both advantages and disadvantages for our clients, as reflected in our 2025 revenue range."

China Impact and Geopolitical Risks

Despite geopolitical challenges and export restrictions targeting China, ASML's CEO expressed confidence in the company's China operations. However, he acknowledged that geopolitical risks could affect sales and impact the lower end of their 2025 guidance.

Dismissing AI Cost Concerns

Concerns over a cost-effective AI model from Chinese firm DeepSeek had cast doubts on demand for AI chips. However, Fouquet dismissed these concerns, arguing that lower AI costs could lead to increased application and, subsequently, higher chip demand.

About ASML

ASML holds a dominant position as the exclusive manufacturer of complex machines employing EUV lithography technology. Its clients include leading chip manufacturers like TSMC, which supply chips to tech giants such as Nvidia and Apple.