As ASML Cuts the 2025 Forecast, Chip Stocks Are in Chaos

Key Takeaways

• Global semiconductor stocks lost $420 billion as a result of ASML’s lower sales projection for 2025.
• The corporation saw its biggest one-day slump in 25 years when its stock fell 16%.
• The market capitalization of Nvidia, which momentarily overtook Apple as the most valuable business, fell by $158 billion.

Nvidia momentarily surpassed Apple as the most valuable business in the world, and ASML’s poorer sales outlook has caused turmoil in the semiconductor market.

Due to ASML’s October 15 altered sales projection for 2025, which sent shockwaves through the industry, investors in the semiconductor business are dealing with increased uncertainty.

According to Reuters, the Dutch chip equipment manufacturer cut its income projections because of the dwindling market for non-AI chips, which resulted in a huge $420 billion loss for semiconductor equities worldwide.

In contrast to its earlier projection of $43.5 billion, ASML’s most recent forecast reduced its predicted net sales for 2025 to $32 to $38 billion.

ASML’s stock fell 16% as a result of the announcement’s early release, wiping off almost $54 billion from the company’s capitalization and causing the biggest one-day decline in over 25 years.

Big semiconductor companies are affected

The semiconductor industry as a whole was affected. Shares of Asian semiconductor behemoths such as Samsung Electronics and Taiwan Semiconductor Manufacturing Co. (TSMC) fell 2.3% and 2.5%, respectively. Additionally, chip manufacturers AMD, Intel, Arm, and Broadcom suffered, which caused the Philadelphia Semiconductor Index to drop 5%.

Apple Stock Underperforms Nvidia Stock

This development occurs just one day after Nvidia overtook Apple as the most valuable business in the world. But after ASML’s projection on Tuesday, Nvidia’s stock fell 4.5%, depleting its market worth by around $158 billion.

Investors are now forced to question if Nvidia’s recent rise to the top of the global corporate hierarchy could be threatened by this widespread drop in semiconductor equities.

The recent decline in chip equities is comparable to the steep sell-off that occurred in August of last year when Arm Holdings released a cautious forecast. This raised concerns that returns from the surge in AI spending spearheaded by corporate behemoths like Amazon, Microsoft, Alphabet, and Meta would take longer to manifest than anticipated. The day saw a 16% decline in Arm shares, making it the worst day for U.S. chip stocks since 2020.

Despite these uncertainties, investors may find the support they need now as they wait for improved semiconductor market circumstances in 2025, thanks to earnings announcements from major manufacturers like TSMC.