ASML Stock Sees Significant Gains Following Strong Earnings Report

Shares of the semiconductor equipment firm ASML (NASDAQ: ASML) experienced a notable increase today after the company announced its fourth-quarter results for the period ending December 31, which exceeded Wall Street's expectations. Both ASML's revenue and earnings surpassed analysts' forecasts, leading to a positive outlook from the company's CEO.

Today, ASML's shares surged by over 7%, and by 11:03 a.m. ET, they were up by 4.1%.

Strong Quarterly Performance

For the fourth quarter, ASML reported earnings of 6.85 euros per share (approximately $7.14), which was better than the average estimate of 6.72 euros ($7). Additionally, the company's reported revenue stood at 9.3 billion euros ($9.7 billion), exceeding the anticipated 9.1 billion euros ($9.5 billion) as estimated by Wall Street.

The growth in ASML’s semiconductor equipment sector is largely attributed to increased investments by companies looking to build infrastructure for artificial intelligence (AI). CEO Christophe Fouquet emphasized this trend in a press release, stating, "Consistent with our view from the last quarter, the growth in artificial intelligence is the key driver for growth in our industry. It has created a shift in the market dynamics that is not benefiting all of our customers equally, which creates both opportunities and risks as reflected in our 2025 revenue range."

Looking ahead, ASML forecasts its 2025 revenue will reach approximately 32.5 billion euros ($33.8 billion) at the midpoint of their guidance, which marks a nearly 15% increase compared to their expected revenue for 2024.

Potential Benefits from Cheaper AI Technology

Along with the impressive quarterly results, comments from CEO Fouquet likely played a role in boosting the stock price this morning. When asked about ASML's position in relation to AI start-up DeepSeek, which has claimed to develop an advanced AI model that requires fewer chips and less investment than competing technologies, Fouquet remarked that lower-cost AI could ultimately benefit ASML.

"I don't know exactly what DeepSeek can or cannot do, but I say again, anything that will drive costs down is good news for ASML in the long term," he stated.

Earlier this week, ASML's shares, like those of other AI companies, faced declines as investors expressed concerns over potential overspending in AI development. However, the latest quarterly performance indicates that ASML is capitalizing on the rising demand for AI processors, and Fouquet's comments should reassure investors that even with the emergence of more affordable AI models, the company remains well-positioned to thrive.

The author does not hold any positions in the mentioned stocks. The Motley Fool has holdings in and recommends ASML. The Motley Fool has a disclosure policy.

ASML, Earnings, Stocks