ASML’s Weak Bookings Are Spooking Investors. Is This a Buying Opportunity?
The Dutch lithography giant reported weak forward bookings. Does the stock's recent selloff represent a buying opportunity?
October 18, 2023
Dutch semiconductor equipment giant ASML (Nasdaq: ASML) reported third quarter results that largely met its internal guidance. Revenue grew 25% to 6.7 billion euros (about $7.1 billion USD) and earnings per share were up 12% 4.81 euros ($5.07).
Yet the stock was selling off around 5% on Wednesday morning trading, likely due to tepid forward guidance. ASML announced only 2.6 billion euros in upcoming bookings, which is a stark decline from the 8.9 billion euros of forward bookings at this time last year.
That indicates that the semiconductor industry at-large might be cooling down next year. 2023 was a year marked by euphoria for artificial intelligence, which called for new fabs built on multiple continents to keep up with the thirst for cutting-edge chips.
Yet between higher interest rates, a possible global recession, and a fresh new ban from the US on chips that can’t be shipped to China, it’s quite likely that the upcoming year’s sales will be a bit more lukewarm.
ASML CEO Peter Wennink commented on his company’s forward guidance:
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