ASML's stock price plummets after earnings; Evercore ISI calls for "buying on dips"
ASML's stock price fell 8.3% after the release of its second-quarter financial report. Evercore ISI believes this is a buying opportunity, maintaining its "outperform" rating with a target price of €803. Analyst Mark Lipacis pointed out that the expectations of weak performance have already been reflected in the stock price. Although gross margins may decline in the second half of the year, strong demand for artificial intelligence is still expected to achieve the revenue target for 2025
According to the Zhitong Finance APP, Evercore ISI stated that ASML (ASML.US) saw its stock price drop after announcing its second-quarter earnings, which presents a buying opportunity. Evercore ISI maintains an "outperform" rating on ASML's shares listed on the Amsterdam Stock Exchange, with a target price of €803, approximately 14% higher than the closing price on July 15.
Evercore ISI analyst Mark Lipacis said, "Given that ASML's price-to-earnings ratio has compressed by 35% to 40% over the past nine months, we believe that the expectations for weak performance have already been reflected in the stock price, and it is time to buy on the dip."
Lipacis noted that ASML's management expects gross margins to trend downward in the second half of the year due to revenue recognition from high numerical aperture technology and a reduction in the upgrade service portfolio.
He stated that while ASML is still expected to achieve its revenue target for 2025 (with a median of €32.5 billion), there is more uncertainty regarding the outlook for 2026. However, Lipacis added that ASML's management indicated that demand for artificial intelligence has been strong this year to date, serving as a key growth driver for foundry logic and the DRAM market.
Data shows that the Dutch chip equipment manufacturer ASML had a strong performance in the second quarter, with total revenue of €7.7 billion and net profit of €2.3 billion, both at the upper limit of guidance. However, management warned that uncertainties arising from macroeconomic and geopolitical developments are intensifying, and it may not achieve growth in 2026.
As a result of this news, ASML's stock price plummeted by 8.3% as of Wednesday's market close
