Semiconductor Stocks Surge as ASML Reports Record Orders
Semiconductor stocks experienced a significant boost on Wednesday, largely driven by the impressive performance of Dutch semiconductor company ASML. ASML announced that it had received record orders in the fourth quarter, causing its shares to soar.
ASML’s sales showed remarkable growth, increasing by 12.5% year-over-year to reach €7.2 billion. The company’s net bookings for the quarter amounted to a staggering €9.2 billion, more than tripling the figure from the previous quarter. The impressive increase in orders resulted in a net profit rise of 12.7% to approximately €2 billion. Although the gross margin slightly dipped to 51.4% from the previous quarter’s 51.9%, ASML still managed to generate a net income of €7.8 billion, with sales climbing by 30% to reach €27.6 billion.
Looking ahead, ASML Chief Executive Peter Wennink expressed a conservative outlook, stating that the company expects 2024 revenue to be similar to that of 2023. However, ASML also cautioned that its sales to China, its third-largest market, would likely be impacted by new export curbs imposed by the United States and the Netherlands.
For the first quarter of 2024, ASML forecasts net sales ranging between €5 billion and €5.5 billion, with a gross margin between 48% and 49%.
Industry analysts are now questioning how much revenue growth major semiconductor players, such as AMD, Arista, Arm, Broadcom, Infineon, Intel, Micron, Nvidia, and Taiwan Semiconductor, can achieve over the next four years as the demand for AI chips surges. In their analysis, the analysts led by Pierre Ferragu highlight potential upside for all the mentioned companies, with AMD and Taiwan Semiconductor standing out on opposite ends of the risk spectrum.
Following the positive news from ASML, shares of Nvidia, Intel, Taiwan Semiconductor, and Broadcom also experienced an upward trend. However, it wasn’t all positive news in the semiconductor industry, as Texas Instruments (TXN) reported that weakness in the industrial and automotive sectors continues to persist, impacting analog chip companies.
Overall, the recent performance of ASML and the promising outlook for the semiconductor industry has sparked investor optimism. The company’s record-breaking orders and strong financial results suggest a bright future for the semiconductor market, positioning major players for potential revenue growth in the coming years.
References:
ASML (NASDAQ:ASML):
https://www.nasdaq.com/market-activity/stocks/asml
Nvidia (NVDA):
https://www.nasdaq.com/market-activity/stocks/nvda
Intel (INTC):
https://www.nasdaq.com/market-activity/stocks/intc
Taiwan Semiconductor (TSM):
https://www.nasdaq.com/market-activity/stocks/tsm
Broadcom (AVGO):
https://www.nasdaq.com/market-activity/stocks/avgo
Texas Instruments (NASDAQ:TXN):
https://www.nasdaq.com/market-activity/stocks/txn
