Chip-Equipment Maker ASML's Q1 Net Bookings Fall 45% Amid Tariff Uncertainty; Retail Anticipates ‘Major' Market Correction

Dutch semiconductor equipment manufacturer ASML Holdings N.V. (ASML) announced a sharp drop in first-quarter orders, highlighting the impact of President Donald Trump's reciprocal tariffs.

However, quarterly earnings exceeded estimates and revenue was roughly in line. ASML typically is among the first major tech companies to report, prompting traders to read the tea leaves.

ASML stock was among the top five trending tickers on Stocktwits early Wednesday.

Veldhoven, Netherlands-based ASML reported earnings per share (EPS) of 6.85 euros ($7.77) and net sales of 7.74 billion euros for the first quarter of the fiscal year 2025. 

This marked a decline from the year-ago quarter's 6 euros per share and 9.26 billion euros, respectively.

While the bottom-line result beat the 5.78-euro consensus estimate compiled by Finchat, revenue was nearly aligned with the estimate of 7.78 billion euros.

The company noted that first-quarter bookings were 3.94 billion euros, with 1.2 billion euros attributable to the extreme ultraviolet (EUV) lithography systems used in the production of the most advanced microchips used by companies such as Apple (AAPL) and Nvidia (NVDA).

Quarterly bookings, however, fell from 7.08 billion euros a year earlier and missed the 4.89 billion-euro consensus estimate, according to Reuters.

Quarterly gross margins expanded to 54% from the year-ago's 51.7%.

CEO Christophe Fouquet said the gross margin exceeded the guidance, driven by a favorable EUV product mix and achieving performance milestones.

Citing customer conversations, the executive said 2025 and 2026 will be growth years.

"However, the recent tariff announcements have increased uncertainty in the macro environment and the situation will remain dynamic for a while," he added.

Fouquet also said artificial intelligence (AI), which has been the primary driver of the tech industry, "benefits some customers more than others, contributing to both upside potential and downside risks as reflected in our 2025 revenue range."

ASML expects second-quarter net sales of 7.2 billion euros to 7.7 billion euros and a gross margin of 50%-53%, citing uncertainty around the impact of tariffs.

The consensus estimate calls for revenue of 7.75 billion euros.

The company reaffirmed 2025 net sales expectations of 30 billion euros to 35 billion euros, versus a consensus estimate of 32.57 billion euros, and a gross margin of 51% to 53%. 

Following the results, the messages shared on the platform reflected retail traders' anxiety. 

One watcher took ASML's results as a forewarning and said the earnings season would be "a bloodbath." 

Another user also considered the results to be just the beginning. They said weak orders confirm growing uncertainty. Assessing readthroughs for other companies, they said a significant correction is inevitable.

ASML's Nasdaq-listed shares ended Tuesday's session up 1.53% at $683.16, but the stock is down about 1.5% year-to-date

(1 Euro = $1.14)

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