ASML reports boost in full-year sales as it shares outlook for 2025

Dutch semiconductor giant ASML has reported its fourth quarter results, along with full year earnings for 2024.  

The company's total net sales came up to €28.3 billion for the full year 2024, a rise from 2023's €27.6bn. This was mainly driven by the rapid and recent advancements in AI, which in turn has led to an increase in semiconductor demand. 

Net income for 2024 was €7.6bn, which was down from 2023's €7.8bn. 

ASML's share price soared 10.45% on Wednesday morning. 

Strong demand for bookings

Net bookings jumped to €7.1bn in the fourth quarter 2024, a marked surge from the €2.6bn seen in the previous quarter, mainly because of strong demand from TSMC. 

Out of the fourth quarter bookings, extreme ultraviolet lithography (EUV) bookings accounted for €3bn. 

EUV is a technology that makes use of light to print microchips and is critical to making more powerful and smaller chips. At the moment, ASML is the only company to sell and produce EUV systems for semiconductor production. 

However, net bookings for the full year 2024 fell to €18.9bn, a decrease from the €20bn seen in 2023. 

The company expects its total net sales in the first quarter of 2025 to be between €7.5bn and €8bn. Gross margin for the quarter is likely to be between 52% and 53%. For the full year 2025, total net sales is expected to be between €30bn and €35bn, with gross margin estimated to be between 51% and 53%. 

Christophe Fouquet, president and chief executive officer (CEO) at ASML, said in a press release on the company's website: "Consistent with our view from the last quarter, the growth in artificial intelligence is the key driver for growth in our industry. 

"It has created a shift in the market dynamics that is not benefiting all of our customers equally, which creates both opportunities and risks as reflected in our 2025 revenue range."

'Impressive' results

Ben Barringer, technology analyst at investment management company Quilter Cheviot, said in an email note: "ASML has delivered an impressive set of results, comfortably beating expectations across the board and offering reassurance to the market following the turmoil due to concerns around DeepSeek. 

"Revenue came in 2.5% ahead of consensus, with profits exceeding forecasts by 8%. The guidance was also strong, coming in 9% ahead of expectations, with a profit contribution that reinforces confidence.

"Looking ahead, ASML is forecasting 15% growth in 2025, which underlines its confidence in future demand. There are lingering concerns around China, with sales in the region falling from 47% to 27% on a quarterly basis, but this is in line with expectations and has been more than offset by a strong rebound in memory demand from South Korea and the US. 

ASML results raise hope despite DeepSeek's arrival

The arrival of DeepSeek, a Chinese AI-powered chatbot, has caused turmoil in the semiconductor and artificial intelligence markets, following its latest version being released on 20 January. The app is currently the most downloaded free app on the US Apple Store, surpassing OpenAI. 

The company has claimed that its latest AI models are as good or even better than US rivals, such as OpenAI, especially when it comes to tasks such as coding and mathematics, but are far cheaper and use fewer advanced chips. DeepSeek also uses less memory than other competitors which further slashes its costs. 

This has led to rising fears about the future of leading industry giants such as Nvidia, which experienced the largest one-day loss in US history, with nearly $600bn (€576.67bn) wiped off in terms of market value on Monday. DeepSeek also exacerbated concerns of the US not doing enough to curb China's AI advancements. 

ASML's results could be seen as going some way towards abating these worries, especially given the company's robust order book in the fourth quarter of 2024.

A time to wait and see

Russ Mould, investment director at AJ Bell, said in an email note: "ASML is one of the picks and shovels plays on the AI theme shaken by the emergence of Chinese AI innovation DeepSeek, so better-than-expected fourth-quarter earnings will be a relief to investors.

"However, while the company is positive on the outlook and this makes sense for 2025, for which much of its customers' spending is likely already allocated, it will take time to understand if the demand profile will change thanks to DeepSeek for 2026 and beyond.

"Chief executive Christophe Fouquet is clear that AI is the key driver of growth for the industry so if developing generative AI becomes less complex and cheaper, it could be bad news for ASML and other names in the semiconductor industry given sluggish demand for chips for smartphones, tablets and personal computers."