16 April 2025
If you are covering ASML’s latest results and the news Nvidia expects a $5.5bn from tighter export controls, please find a comment below from Ben Barringer, global technology analyst at Quilter Cheviot:
“While ASML delivered on a revenue front, it has left investors disappointed at a time when uncertainty will punish such results. Headline numbers were in line with expectations, but the big disappointment was the order book, coming in at $3.9bn for the first quarter, compared to expectations of around $4.8bn.
“The company maintained its guidance for 2025, but that in itself is also a slight concern as it is a very wide forecast and could result in a number of different growth rates. AI demand remains strong, but the uncertainty around tariffs is driving much of the conservative nature of management. The share price has derated of late and given this uncertainty this is understandable, but with the guidance in place it is difficult to assess if ASML looks cheap or expensive right now.
“What is clear, however, is ASML is getting hit by tariffs. Firstly, and the problem for most tech providers, is demand is going to be destroyed with slowing economic growth. For ASML specifically, however, it still remains unsure what additional costs are going to be incurred as a result of the tariffs, and if there is to be any impact from retaliatory tariffs. With Trump still to decide what happens to tech and semiconductors, this environment will weigh on the likes of ASML.
“The company also isn’t helped by Nvidia’s announcement that it will need an export licence for its H20 AI chip – effectively meaning it will not be able to ship it to China. Nvidia says this will result in a $5.5bn charge and roughly a $13bn revenue hit (10% of revenues). Not huge in the grand scheme of things but still significant and will feed down the tech chain to impact the likes of ASML. All of this just adds to the multitude of headaches facing tech CEOs right now, with no sign of the difficulty ending soon.”
