ASML Drops 7% After Cautious Earnings Outlook

Earnings season is in full swing — that time of year when companies report financial results and share updates on their strategy. It gives investors not just the numbers, but insight into how companies are adapting to a changing environment. Now that the first “interest rate” quarter is behind us, we’re starting to see its effects on earnings. Visit our Earnings Season in Full Swing section for more insights and key dates.

Quick Take:

• ASML released its Q2 results Wednesday morning, July 16; shares immediately fell by about 7%
• The numbers were generally strong: revenue rose 23%, net profit jumped 45%
• However, the company expressed concerns about 2026 growth due to geopolitical uncertainty and the return of Trump-era tariffs
• Long-term investors are reminded to stay focused on the bigger picture and not react to short-term volatility

ASML, a long-time investor favorite, reported its Q2 results this morning — and the market didn’t like what it heard. Shares dropped 7% shortly after the open.

The reason? Despite a solid quarter, ASML raised concerns about growth prospects for 2026. The company cited growing macroeconomic uncertainty, the impact of renewed U.S. trade tariffs under Trump, and ongoing geopolitical tensions.

ASML CEO Christophe Fouquet said:

“Looking ahead to 2026, the fundamentals among our AI customers remain strong, and we are still preparing for growth. But, as we noted last time, uncertainty is increasing — largely due to macroeconomic and geopolitical factors. That includes import duties, of course.”

So, were the results bad?

Not at all. The numbers were quite strong.

Revenue rose 23% year-over-year, while net profit jumped 45%. ASML also reported €5.54 billion in new orders — well above the expected €4.44 billion. For the full year 2025, the company expects revenue to grow by approximately 15%.

One weak spot was the DRAM segment (Dynamic Random Access Memory chips, used for temporary data storage), where revenue dropped 41% compared to the same period last year.

Key Figures at a Glance:

• Total net sales: €7.7 billion
• Gross margin: 53.7%
• Net profit: €2.3 billion
• New bookings: €5.5 billion, including €2.3 billion from EUV (extreme ultraviolet lithography)
• Q3 sales guidance: €7.4–€7.9 billion, with a gross margin of 50–52%
• 2025 outlook: 15% year-over-year growth in total sales, gross margin around 52%

Source: ASML Q2 2025 Results

Still Bullish on the Long-Term Outlook

Despite short-term concerns, ASML remains confident in its long-term prospects — and those of the broader semiconductor industry.

From the quarterly report:

“The semiconductor industry remains strong, driven by the growing adoption of artificial intelligence across a wide range of applications. Industry revenue is expected to exceed $1 trillion by 2030.”

ASML projects its own revenue to reach between €44 and €60 billion by 2030, with gross margins of 56% to 60%. China remains a key market for the company, accounting for 27% of machine sales in the latest quarter despite ongoing export restrictions.

The company also reaffirmed its plans to grow its dividend and to repurchase “significant amounts” of its own shares.

A full video interview is available below. (The article continues after the video.)

What Should Investors Do Now?

ASML has been under pressure for some time. A year ago, the stock was trading nearly 30% higher. By comparison, the AEX index has only fallen by 1% over the same period.

Still, ASML is a global leader in semiconductor manufacturing technology. For long-term investors, it’s important to stay focused on structural trends and consider how geopolitical and economic risks may affect future growth. The cautious tone from ASML itself has created some market uncertainty — and likely contributed to today’s price drop.

In the years ahead, the evolution of artificial intelligence and ASML’s push into next-generation products like EUV machines (advanced chipmaking equipment) will be key drivers of success.

The big question: is this post-earnings drop just a short-term dip — or a sign of slower growth ahead for one of the Netherlands’ flagship tech companies? And has the market already priced in those risks?