- ASML ↑ over 40% year-to-date
- Shares could move 5.7% % ↑ or ↓ post-earnings
- Machinery bookings & forward guidance in focus
- Technical levels – 1120 and 1000
Shares of ASML have been on a tear this year, surpassing the $1000 and €1000 milestone across both exchanges.
Note: ASML shares can be traded on the Euronext Amsterdam and Nasdaq exchanges.
Its position as the world’s leading manufacturer of chip-making equipment has allowed it to benefit from the A.I. frenzy with shares up over 40% year-to-date.
Prices could push higher depending on how investors react to the latest earnings report.
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When will earnings be published?
ASML will report its earnings for the second quarter before US markets open on Wednesday 17th July.
The company is expected to post earnings of €3.74 compared to €4.93 a year ago.
Quarterly revenues are seen falling to €6 billion from €6.9 billion in the prior year – equating to a 13% decline.
As a leading manufacturer of chip-making equipment, its earnings and forward guidance may serve as a gauge for the AI hype.
In the first quarter, ASML disappointed investors with revenues declining by 21% year-over-year to €5.3 billion. While sales are expected to fall in Q2, much focus will be on net machinery bookings which are estimated to be around €4.56 billion. Still, growing demand for AI Chips may translate to a significant increase in new orders.
China is ASML’s biggest market, accounting for 49% of total sales in the first quarter of 2024.
However, this may be impacted by Dutch licensing requirements and US export restrictions. A noticeable decline in total sales in China may weigh on the business outlook.
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How will ASML react to earnings?
Markets are forecasting a 5.7% move, either Up or Down, for ASML stocks on Wednesday post earnings.
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What does this mean for prices?
A 5.7% move up from $1062 will take ASML shares to fresh all-time highs beyond $1120.
While a 5.7% move down will send prices back towards the psychological $1000 level.
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Keep an eye on TSMC’s earnings
Watch out for Taiwan Semiconductor Manufacturing Company (TSMC) which is due to release its earnings on Thursday 18th July.
TSMC accounts for 28% of ASML’s revenue, so better-than-expected earnings from TSMC may boost ASML’s shares and vice versa.
Prices are firmly bullish on the daily charts as there have been consistently higher highs and higher lows.
- A solid set of earnings and forward guidance that satisfies investors could push prices to all-time highs beyond 1120.
- If the manufacturer of chipmakers disappoints, prices could slip back towards the 1000 psychological level.
