ASML – Daily Chart
The price of ASML crashed from the open near $880 on its New York-registered shares. That has support coming in below at the $696 level.
Shares in chip stocks were lower, including a $175 billion market cap loss for Nvidia, after ASML reported weak earnings which accidentally came out earlier than expected.
Shares of other firms involved in designing and manufacturing semiconductors powering the generative AI explosion also tumbled, with AMD, Arm Holdings and Broadcom stocks all sliding at least 3.5%.
Dutch firm ASML, which makes hardware used to make the high-tech AI chips and is a close partner of Nvidia, reported earnings ahead of expectations due to a “technical error.” The release included a management warning of “more gradual” growth for ASML, which said it expects 2025 revenues to come in between $32.7 billion to $38.1 billion, well below consensus analyst forecasts of $39.1.
The stock’s drop was its worst since March 2020 and the second-worst day of the last ten years. The earnings popped a recent bubble in AI stocks after analysts talked of explosive demand for AI chips.
There was further bad news for Nvidia and its peers after Bloomberg said the Biden administration was mulling a further ban on exports of chips to certain countries.
The United States is said to be focused on Persian Gulf countries, according to sources, who said the new rules would place a ceiling on export licences for some countries in the interest of national security.
Such a move would hurt the growth outlook for companies such as Nvidia and, alongside the latest ASML demand slump, could see a further correction in the sector.