ASML Earnings Call Bombshell: Slow Recovery in Chip Demand, Customers Become More Cautious

$ASML Holding (ASML.US)$ CEO Christophe Fouquet noted that while AI continues to be seen as a key driver for industry recovery with potential upside, recovery in other sectors has been slower than anticipated, causing "customers to be more cautious, with some investment plans delayed." He specifically mentioned slow demand recovery in the automotive, mobile, and PC markets. ASML will also slow down its short-term investment plans to align with market demand.

Why did ASML “bomb”? Wall Street says it’s all $Intel (INTC.US)$ ’s fault! Morgan Stanley analysts suggest that key ASML customer Intel may be a major factor in the demand slowdown, with delays in new nodes also affecting capacity expansion. While HBM and DDR5-related spending continues, these aren't as reliant on EUV as logic chips, which remain weak.

Analysts also noted that the most disappointing part of ASML’s earnings report was its order backlog, which fell sharply to €2.63 billion, the lowest in nearly three years. Despite the AI and memory upgrades, the company’s order book didn’t grow but was instead cut in half, delivering a cold shower to the market. This sudden order drop was mainly due to increased regulatory restrictions and some customers suddenly slashing orders.