ASML Just Plummeted After Earnings: Is This a Buying Opportunity

In a recent episode of the AI Investor Podcast, analysts Austin Smith and Eric Bleeker delved into the current state of ASML (Nasdaq: ASML), a leading semiconductor equipment manufacturer, which saw a large decline in its share price after last reporting earnings.

The conversation highlighted ASML’s absence from the $500,000 AI Portfolio Eric Bleeker has built of leading AI stocks.

Bleeker explored whether this decline presents a buying opportunity, especially considering the shifting landscape of technology trade between the U.S. and China. 

He emphasized that ASML’s struggles are closely tied to geopolitical tensions, particularly the recent easing of restrictions on NVIDIA‘s chip sales to China.

While this development could potentially benefit ASML, the company remains at risk of being caught in the crossfire of U.S.-China relations. The United States hs cleared NVIDIA’s H20 chips for export to China, but a recent Wall Street Journal profile highlighted that Trump Administration officials in the US could use harsher restrictions of semiconductor equipment from the likes of ASML as a bargaining chip if trade negotiations sour again.

He likened ASML’s situation to “Princess Peach kidnapped in the castle,” underscoring the challenges it faces in a rapidly evolving tech environment. Despite these hurdles, Bleeker maintains a long-term positive outlook for ASML, recognizing its critical role in the semiconductor industry.

Watch the Full Discussion on ASML’s Most Recent Earnings 

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If you enjoyed this discussion, make sure to listen to the full latest episode of 24/7 Wall St.’s AI Investor Podcast. In the podcast, we not only break down the biggest news happening in the AI space, but also invest $500,000 of Eric Bleeker’s personal capital into leading AI stocks. Best of all? It’s absolutely free to listen. You can listen to the latest episode in either Spotify or Apple Podcasts below. 

Transcript

Austin Smith: I was curious, ASML is notably absent from the portfolio. We’ve called this just one of the most
interesting AI misses, given that it, you know, all of the mega trends, we’re seeing ASML really
weak last few years.

Best in class technology on lithography down 10% as of the moment of this
filming. Is this a buying opportunity for ASML?

And the reason I ask is NVIDIA was not able to sell their chips into China, but now they are able
to, and I’m putting you on the spot a little bit. I want our listeners to be clear, you’re not, you
know, you’re, you’re not going through the conference call in real time here, but. If we see this
sudden reversal in East/West rech stack regulations and now NVIDIA can sell their chips into
China, does that sort of flexibility ultimately flow downstream to ASML or is the horse outta the
barn and China saying, you know, whatever, we’ve been building our own lithography for 18
months, we’re gonna stay on this train.

Do you see this as a buying opportunity for ASML, or is this truly just a company that is always
gonna be stuck between two great powers?

Eric Bleeker: Yeah. First of all, a little plug here. We did have a
live earnings blog, which I was hosting this morning for ASML. As you know, they are on
their conference call right now. I am not able to attend that if you’re hearing some dings in the
background. I live next to a playground. Some kids are banging on it. Hopefully that is not too
intrusive.

Austin Smith: They’re cheering on the stock picks. They wanna hear whether or not ASML is a
buy. 

Eric Bleeker: I’ll have to go over and yell at them like an old man once this finishes, but yeah.

So ASML in the actual Wall Street Journal article talking about the H-20 restrictions being
removed, they had said the Commerce Department has prepared harsher restrictions on
China, including limits on equipment needed to make the semiconductors in case trade relations
sour again.

So what is the primary reason that ASML is down 10%? It’s because in their
earnings, they said they would not confirm growth for 2026. Right?

Why can they not confirm growth? Well, that sentence I just read out loud because they, as you know, we’ve got these
negotiations and NVIDIA goes from being held over a barrel as the literal negotiating chip.

Now, ASML becomes the negotiation chip. Is this a company I think will be successful over the long
run? Yes. I still do, but I have said since nearly the outset [of this show], we had previewed in the first
episode, but then we didn’t add it because of these geopolitical fears. Do I continue to be
concerned about what the near term looks like for the company?

They had just become very reliant on China and they need to, to get towards growth, they need to kind of
digest this period of no growth. I think it is a little fraught. So, you know, this is, this is just
again, where the details matter and why we’ve avoided some areas of semiconductor equipment,
which was traditionally been an incredible investment space, is just there are winners and losers
from this new Cold War and I believe for the foreseeable future, ASML continues to be…

They’re like Princess Peach kidnapped in the castle. You know, they are, they are that thing that we
can always hold over China. Lithography is China’s hardest to replicate Western technology, and that’s potentially
beneficial for other companies that get advantages, but very poor for ASML itself.

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