Nvidia, AMD Tumble as ASML Cuts 2025 Forecast, Sparking Concerns in Chip Sector

ASML Shares Drop Sharply After Weak Sales Outlook

Shares of ASML, the Dutch semiconductor equipment maker, fell by over 15% on Tuesday following the early release of its earnings report. The drop was driven by a disappointing sales outlook for 2025, causing a ripple effect in the broader chip sector. Nvidia, Advanced Micro Devices (AMD), and Broadcom all declined by at least 4% as traders responded to the weaker forecast.

Lowered 2025 Sales Guidance

ASML revised its sales outlook for 2025, now forecasting net sales between €30 billion and €35 billion, at the lower end of its previous estimate. This downgrade surprised the market. “We expect our 2025 total net sales to grow to a range between €30-35 billion, which is the lower half of the range we provided at our 2022 Investor Day,” said CEO Christophe Fouquet.

The company’s third-quarter net bookings, which totaled €2.6 billion, were significantly below the consensus estimate of €5.6 billion. Fouquet pointed to slower recoveries outside AI-driven sectors: “While there continue to be strong developments and upside potential in AI, other market segments are taking longer to recover.”

Impact on Broader Semiconductor Sector

ASML’s announcement sent shockwaves through the semiconductor industry, with major chip stocks like Nvidia and AMD tumbling in response. These companies, heavily reliant on ASML’s lithography machines for producing advanced chips, saw their stocks fall over 4%.

The tech-heavy Nasdaq Composite dropped 0.8%, while the S&P 500 and Dow Jones each fell 0.3%, reflecting the market’s broader concerns about chip demand.

Strong Q3 Earnings Overshadowed

Despite the negative market reaction, ASML posted stronger-than-expected Q3 earnings. However, the focus remained on the weaker 2025 outlook. As a key supplier in the semiconductor sector, ASML’s cautious guidance raised concerns about a slower recovery, particularly in non-AI segments. “Certain market segments, such as memory chips, are experiencing more sluggish recoveries,” Fouquet noted.

Market Forecast: Bearish Sentiment on Chips

In the short term, semiconductor stocks may face continued pressure as investors adjust to ASML’s downgraded 2025 forecast. The slower-than-expected recovery in non-AI sectors could weigh on chipmakers. However, the long-term growth potential in AI offers some optimism for a rebound once market conditions stabilize. Traders should anticipate volatility, with a bearish outlook prevailing in the near future.