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NEWS
ASML Sinks The Stock Market

The selloff in U.S. stocks accelerated after semiconductor giant ASML Holding accidentally released its worse-than-expected quarterly results a day before the market expected them. Under the surface, speculation continues to run rampant, with the small-cap Russell 2000 finally looking ready to join the bull market. 👀

Today's issue covers ASML’s sticky earnings situation, the explosion of speculative behavior in several stocks, and an overview of the biggest earnings movers. 📰

Here’s the S&P 500 heatmap. 6 of 11 sectors closed green, with real estate (+1.25%) leading and energy (-3.22%) lagging.

And here are the closing prices: 

Most bullish/bearish symbols on Stocktwits at the close: 📈 $JDZG, $KLAC, $AMAT, $PHUN, $ERIC 📉 $RMCO, $COTY, $ACAD, $ANF, $LLY*

*If you’re a business and want to access this data via our API, email us.

EARNINGS
Semiconductor Giant’s Sticky Earning Situation 😬

Dutch semiconductor equipment maker ASML is closely watched as a major bellwether of the chip industry, and its impact was certainly felt today.

A technology error caused the company to partially release its third-quarter earnings a day earlier than anticipated, with shares responding sharply less than an hour after the opening bell. That caused the company to share the remainder of its results to give investors the complete picture, which wasn’t what bulls hoped for. 😱

The company now expects net sales of 30 to 35 billion euros during 2025, landing at the lower end of its forecast. Net bookings for this quarter were 2.6 billion euros, well below the 5.6 billion euro consensus estimate, though its net sales of 7.5 billion euros did top expectations. 🔻

CEO Christophe Fouquet said, “While there continue to be strong developments and upside potential in AI, other market segments are taking longer to recover. It now appears the recovery is more gradual than previously expected,”

In addition to industry-specific headwinds, China remains a major concern for the company. Last quarter, ASML said that roughly 49% of its revenues came from China, but CFO Roger Dassen provided a much more cautious view this time. ⚠️

He now expects the company’s China business to show a “more normalized percentage in our order book and also in our business.” More specifically, management expects China’s revenue to be roughly 20% of total revenue for the next year.

Today’s release shows that artificial intelligence (AI), while a large driver of semiconductor growth, is not enough to offset some of the cyclical weakness and customer-specific challenges facing ASML and the broader industry.

Shares fell roughly 16% on the day, dragging the rest of the chip sector and market down with it. Even as shares sit in a 35% drawdown from their highs, Stocktwits sentiment remains in ‘bullish’ territory as investors bet on the AI boom being enough to propel ASML and the rest of the sector higher for years to come. 🐂

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