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ASML earnings preview - steady hands needed as the chip cycle turns
Koen Hoorelbeke
Investment and Options Strategist
ASML earnings preview: steady hands needed as the chip cycle turns
Key points
- ASML reports earnings on Wednesday 16 July before the Amsterdam market opens
- Analysts expect EPS of €5.19 on revenue of €7.51 billion, with margins slightly down
- Options pricing suggests a ±7% move, above historical average
- Watch for updates on EUV/High-NA tool shipments, order trends, and full-year guidance
- Long-term investors should focus on execution, not short-term swings
ASML is set to report its second-quarter earnings on Wednesday morning, 16 July 2025, before markets open in Amsterdam. Expectations are high. Analysts believe the company will show a rebound in earnings, even as revenues may tick down slightly. At the same time, options traders are bracing for a bigger move than usual, suggesting the market is on edge.
What to expect
Analysts forecast earnings of €5.19 per share on revenues of about €7.51 billion. That would mark a solid bounce in profit compared to the previous quarter, even though sales are expected to be slightly lower. One reason: ASML is likely making progress on its newer, more advanced machines, which carry higher profit margins over time.
However, not everything is moving in the right direction. Gross margins are expected to dip—from 54% to 51.9%—as the company continues to invest heavily in its next-generation technology. This includes the rollout of High-NA EUV lithography tools, which are still in their early commercial stages.
On the cash side, ASML is expected to swing back to positive free cash flow, with analysts looking for around €2 billion. That would be a welcome reversal after a cash outflow in Q1, and a signal that the company is managing its inventory and working capital more efficiently.
Market mood: nervous but optimistic
Investors are divided. On the one hand, 43 analysts cover the stock, and the average price target sits at €765, about 11.5% above where the stock trades now. The majority of those analysts still rate ASML a "Buy" or "Overweight."
At the same time, short-term options markets tell a different story. Traders are pricing in a potential 7% move in either direction on earnings day. That’s more than usual, and it shows that many are hedging their bets.
What matters most
Long-term investors will want to pay close attention to:
- New machine shipments: Is ASML delivering on its promise to roll out more advanced EUV and High-NA tools?
- Order growth: Are chipmakers still placing large orders, or are they pulling back?
- Profit margins: Are newer machines helping offset rising costs?
- Outlook for the year: Will management stick to its revenue guidance of €30 to €35 billion, or narrow the range?
These are the big levers that shape ASML’s long-term story. A short-term earnings beat or miss will matter less if the company shows steady progress in these areas.
The technical picture
ASML shares have been moving sideways for most of the year. The stock is currently hovering between its 50-week and 200-week moving averages, both key levels that investors often watch for signs of momentum.
A strong earnings report and upbeat guidance could be enough to push the stock out of its recent range. But a disappointing update could just as easily send it back toward the lower end.
Practical investor takeaways
This earnings release might not offer fireworks, but it does offer signals. Here are three ways investors can stay ahead of the curve:
- Track the tone, not just the numbers: Is management confident or cautious when talking about the rest of the year? Subtle shifts in tone often matter more than a few cents on EPS.
- Look beyond the quarter: If you're investing for the long haul, focus on progress in key areas like High-NA adoption and new customer orders. These are the building blocks of future growth.
- Let volatility work for you: Earnings-related swings can create entry points. If you've been waiting to start or add to a position in ASML, a post-earnings dip might offer an attractive window—if the long-term story remains intact.
Bottom line
ASML remains one of Europe’s most important tech companies and a key player in the global semiconductor supply chain. For long-term investors, the focus isn’t just on this quarter’s numbers, but on signs that ASML is staying ahead in its field.
With the broader chip cycle entering a new phase, and geopolitical risks still looming in the background, steady execution and clear guidance will be key. Whether or not the market gets that on Wednesday will determine how the next few months shape up for ASML investors.
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