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Why ASML Holding Stock Is Down 15% This Month
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Why ASML Holding Stock Is Down 15% This Month
Nov 3, 2024 2:00 PM

ASML Holding NV ( ASML ) shares have tumbled 15% to $706 in October after the company morning trading following the reported third-quarter earnings, raising concerns about growth prospects in the semiconductor sector.

The sharp sell-off was triggered by the Dutch semiconductor equipment giant's downward revision to its 2025 sales forecast, casting a shadow over ASML’s growth trajectory in a challenging market environment.

What To Know: ASML ( ASML ), a critical supplier of photolithography machines essential to advanced chip manufacturing, reported that it now expects 2025 net sales to fall between €30 billion and €35 billion ($32.7 billion to $38.2 billion), down from its previous outlook range of €30 billion to €40 billion.

This adjustment indicates the company foresees a softer demand environment than initially projected, especially in markets outside of artificial intelligence (AI) and high-performance computing where demand has remained strong.

However, ASML ( ASML ) noted that sluggish recovery in other key sectors—especially in personal electronics and general consumer goods—has impacted the pace of its growth.

Read Also: 6 Economic Frights That Could Haunt Markets This Halloween: ‘A Tipping Point For Risk Appetite,’ Analysts Warn

What Else: Despite these concerns, ASML's ( ASML ) third-quarter results showed robust performance. The company reported net sales of €7.5 billion for the third quarter, exceeding analysts' expectations of €7.12 billion, alongside a strong net income of €2.1 billion and a gross margin of 50.8%.

Notably, bookings for the quarter reached €2.6 billion, with €1.4 billion attributed to EUV systems—an indicator that demand for the most advanced semiconductor equipment remains resilient even amid broader market pressures.

For the fourth-quarter, ASML ( ASML ) projected net sales between €8.8 billion and €9.2 billion with a gross margin ranging from 49% to 50%, reaffirming its full-year guidance of approximately €28 billion in total sales.

ASML ( ASML ), as the world's only supplier of EUV photolithography equipment, plays an essential role in the semiconductor ecosystem, making its forecasts a bellwether for the sector.

The company's sales downgrade hints at potentially weaker demand for semiconductor manufacturing equipment overall, as customers adjust investment plans in response to uncertain recovery timelines.

Read Also: PayPal Q3 Earnings: Revenue Falls Short of Expectations, Strong Payment Volume Growth, CEO Sees 15%-20% Increase In BNPL

How To Buy ASML Stock

By now you're likely curious about how to participate in the market for ASML Holding ( ASML ) – be it to purchase shares, or even attempt to bet against the company.

Buying shares is typically done through a brokerage account. You can find a list of possible trading platforms here. Many will allow you to buy ‘fractional shares,' which allows you to own portions of stock without buying an entire share. For example, some stock, like Berkshire Hathaway, or Amazon.com, can cost thousands of dollars to own just one share. However, if you only want to invest a fraction of that, brokerages will allow you to do so.

In the the case of ASML Holding ( ASML ), which is trading at $707.08 as of publishing time, $100 would buy you 0.14 shares of stock.

If you're looking to bet against a company, the process is more complex. You'll need access to an options trading platform, or a broker who will allow you to ‘go short' a share of stock by lending you the shares to sell. The process of shorting a stock can be found at this resource. Otherwise, if your broker allows you to trade options, you can either buy a put option, or sell a call option at a strike price above where shares are currently trading – either way it allows you to profit off of the share price decline.

According to data from Benzinga Pro, ASML ( ASML ) has a 52-week high of $1,110.09 and a 52-week low of $582.49.

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