Chipmakers Hurt by ASML Plunge, US Export Talk

Shares of chipmakers were slumping on Tuesday after Dutch firm ASML (NYSE:ASML) saw its stock drop by more than 16%. There was also talk of the US government clamping down on chip sales to certain companies.

ASML-–-Daily-ChartASML – Daily Chart

The price of ASML crashed from the open near $880 on its New York-registered shares. That has support coming in below at the $696 level.

Shares in chip stocks were lower, including a $175 billion market cap loss for Nvidia, after ASML reported weak earnings which accidentally came out earlier than expected.

Shares of other firms involved in designing and manufacturing semiconductors powering the generative AI explosion also tumbled, with AMD, Arm Holdings and Broadcom stocks all sliding at least 3.5%.

Dutch firm ASML, which makes hardware used to make the high-tech AI chips and is a close partner of Nvidia, reported earnings ahead of expectations due to a “technical error.” The release included a management warning of “more gradual” growth for ASML, which said it expects 2025 revenues to come in between $32.7 billion to $38.1 billion, well below consensus analyst forecasts of $39.1.

The stock’s drop was its worst since March 2020 and the second-worst day of the last ten years. The earnings popped a recent bubble in AI stocks after analysts talked of explosive demand for AI chips.

There was further bad news for Nvidia and its peers after Bloomberg said the Biden administration was mulling a further ban on exports of chips to certain countries.

The United States is said to be focused on Persian Gulf countries, according to sources, who said the new rules would place a ceiling on export licences for some countries in the interest of national security.

Such a move would hurt the growth outlook for companies such as Nvidia and, alongside the latest ASML demand slump, could see a further correction in the sector.

Recent News
Start Trading Now !

Try our demo account for free to learn trading. When you’re ready, switch to a live account and start trading for real.

Popular posts
ATFX

Restrictions on Use

Products and Services on this website are not suitable for the UK residents. Such information and materials should not be regarded as or constitute a distribution, an offer, or a solicitation to buy or sell any investments. Please visit https://atfxvnmprd.wpenginepowered.com/en-au/ to proceed.

ATFX

Restrictions on Use

Products and Services on this website are not suitable for Hong Kong residents. Such information and materials should not be regarded as or constitute a distribution, an offer, solicitation to buy or sell any investments.

使用限制: 本網站的產品及服務不適合香港居民使用。網站內部的信息和素材不應被視為分銷,要約,買入或賣出任何投資產品。

ATFX

Restrictions on Use

AT Global Markets (UK) Limited does not offer trading services to retail clients.
If you are a professional client, please visit https://atfxconnect.com