17 April 2024
If you are covering ASML’s latest financial results, please find below a comment from Ben Barringer, technology analyst at Quilter Cheviot:
“ASML’s latest financial results were not the numbers many investors had been hoping for or expecting. After an excellent Q4 orders, Q1 orders were expected to shrink due to their lumpy nature, but the amount that they fell was worse than expectations and could potentially be an early warning sign for concern. There a number of factors at play; the economic environment is still incredibly uncertain and thus customers are not ordering in the same quantities as they have done previously; there is a transition in product in 2025 so some may just be holding off and preserving any spend; it’s still early in the year and things may turn around; and finally, China sales are good but difficult to gauge as to what will happen going forward.
“For ASML, this is no time to panic. Investors and industry watchers remain focused on 2025 given the introduction of new products and the fact that 2024 remains a year of recovery for the sector. The fall in the share price, therefore, is potentially overblown for now, however, it will be interesting to see what TSMC says tomorrow at its results update given it is ASML’s biggest customer. While ASML is a robust and quality business, should TSMC warn about its growth or spend, then it could be in for a tougher year than feared.”
