MW ASML gets a downgrade ahead of results. Key client Intel is to blame.

By Steve Goldstein

ASML Holding, the microchip-equipment maker that produces the sophisticated machines used to develop semiconductors, caught a broker downgrade just ahead of its second-quarter results.

KBC Securities analyst Thibault Leneeuw downgraded ASML to hold from accumulate and cut the price target to EUR686 ($801) from EUR703.

ASML shares (NL:ASML) rose 3% to EUR705 in Dutch trade, boosted by news that Nvidia (NVDA) plans to start selling a key microchip in China again. This year, its U.S.-listed shares $(ASML)$ have outperformed the Nasdaq 100 NDX, of which it's a constituent, with a 16% rise vs. 9% for the broader index.

The analyst said ASML may lose market share this year as adoption for extreme ultraviolet lithography is delayed, saying that "recent commentary and industry signals point towards a limited and selective use of high NA," using the abbreviation for high numerical aperture.

The issue is that Intel $(INTC)$, which is driving the adoption of the most advanced ASML system, has the weakest outlook.

Another problem is that the backlog coverage is at its lowest point of the past four years. The only positive trigger could be significant orders from Taiwan Semiconductor $(TSM)$, he said.

As for second-quarter results in particular, Leneeuw actually is forecasting better bookings than consensus, of EUR6 billion vs EUR4.45 billion. His earnings outlook is 1% below the market's 5.19 per share and sales outlook is 3% below the consensus estimate of EUR7.75 billion.

"If bookings would come in above EUR4.4bn and there would be a positive market reaction we would see it as a great opportunity to reduce exposure," he said.

-Steve Goldstein

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July 15, 2025 08:14 ET (12:14 GMT)

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