ASML, a leader in semiconductor equipment, reported better-than-expected earnings for the second quarter, but its sales guidance fell short of Wall Street's expectations. The Netherlands-based company earned $4.36 a share on sales of $6.79 billion, surpassing analyst predictions of $4.03 a share on sales of $6.53 billion. However, ASML's earnings fell 21% year-over-year, and sales declined 12%. For the current quarter, ASML forecasted sales of $7.66 billion, below analysts' expectations of $8.24 billion. The stock dropped 12.7% to $932 on this news and fell also due to concerns over potential increased export restrictions to China, a significant market for ASML, which accounted for 49% of its revenue in the first and second quarters.
Despite the recent setbacks, ASML maintained its full-year outlook for 2024, and its Chief Executive highlighted strong developments in AI as a driver for industry recovery and growth. As reported by Patrick Seitz, Investors Business Daily author, analysts had mixed reactions. He wrote, “CFRA Research analyst Brooks Idlet cut his price target on ASML stock to 1,113 from 1,169 but kept his buy rating after the Q2 report. He lowered his price target on news of potential further export restrictions to China.” Additionally, Bernstein's Sara Russo emphasized robust bookings and maintained an outperform rating with a $1,052 price target. Other stocks also declined alongside ASML's drop, including Nvidia and Taiwan Semiconductor. Nvidia fell 6.6%, and Taiwan Semiconductor plunged 8%. These declines highlight the volatility that can occur during earnings season which can affect multiple stocks within the same industry.
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