ASML Earnings: Strong Orders and Conservative Outlook

We continue to believe ASML stock is undervalued.

Javier Correonero 30 January, 2025 | 9:38AM
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Logo of ASML - Advanced Semiconductor Materials Lithography as seen at the wall of the building at the headquarters of the company. ASML is a Dutch multinational corporation, developing and manufacturing photolithography machines which are used to produce computer chips, it is the largest supplier for the semiconductor industry and the unique supplier in the world of extreme ultraviolet lithography EUV photolithography machines. The company is a highly valued European tech company with a market capitalization about US$280 billion. ASML Holding NV Headquarters in Veldhoven, the Netherlands on January 23, 2024 (Photo by Nicolas Economou/NurPhoto via AP)

Key Morningstar Metrics for ASML Holding


What We Thought of ASML Holding’s Earnings

ASML Holding ASML exceeded all expectations in its fourth-quarter results, with shares surging 11% intraday. New orders came in strongly at EUR 7.1 billion—in a context where EUR 4 billion would have been a success. Despite this strength, management remained cautious and maintained its EUR 30 billion-EUR 35 billion revenue guidance for 2025. Although this can look conservative at first glance, it’s based on the weakness shown by Intel INTC and Samsung, which have likely pushed some orders to 2026, as they still have challenges in ramping up production of leading-edge nodes. We’ve raised our 2025 revenue estimate to EUR 34.2 billion from EUR 32.5 billion, but maintain our fair value estimate, as our long-term forecasts remain largely unchanged. Shares still offer 20% upside.

Taiwan’s contribution to 2024 total system sales has been low at only 11% compared with a 31% average from 2015-24. We see room for incremental Taiwan Semiconductor Manufacturing TSM orders to show up in ASML’s books during 2025. This is supported by Taiwan Semiconductor’s strong capital expenditure guidance of EUR 36.5 billion-EUR 40.5 billion, a 34% year-on-year increase at the midpoint. The firm keeps ramping up production of its 2nm process node at the Hsinchu and Kaohsiung fabs, which will require more tooling. Additional orders in the coming quarters should increase visibility into 2026, but the outlook still faces uncertainty.

These tailwinds could be offset by weaker capex trends from Intel and Samsung. Any updates on their spending plans will provide further clarity on fab equipment demand over the next 12-18 months. According to the South Korean newspaper Software Engineering Daily, Samsung is slashing its 2025 foundry capex by 50% to EUR 3.37 billion. Intel and Samsung report earnings on Jan. 30 and 31, respectively. On the memory front, Micron Technology MU will increase capex to EUR 13.6 billion in 2025 from EUR 7.8 billion in 2024, while SK Hynix 000660 signaled flat spending.

ASML Holding Stock vs. Morningstar Fair Value Estimate

Source: Morningstar Direct. Latest price as of 12:00 PM CET.


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Javier Correonero  is an equity analyst for Morningstar

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