Is ASML still worth buying?

ASML released its Q3 financial data ahead of schedule, but its stock price plummeted by over 15%, nearly wiping out all its gains for the year.

The company's guidance for this earnings report includes an expected net sales range of €8.8 billion to €9.2 billion for Q4 2024. Additionally, the company anticipates a gross margin between 49% and 50%.

For the entire fiscal year 2024, ASML expects net sales of approximately €28 billion. For fiscal year 2025, ASML projects net sales between €30 billion and €35 billion, with a gross margin ranging from 51% to 53%.

CEO Christophe Fouquet stated that the 2025 net sales guidance falls in the "lower half of the range we provided during the 2022 Investor Day." Fouquet attributed the gross margin to "delayed EUV demand," which is also below previous expectations.

The lower-than-expected Q3 sales and 2025 sales guidance were the direct causes of the sharp decline. Of course, this also reflects deeper investor concerns, including U.S.-China relations and slowing demand from China.

However, ASML remains one of the most valuable stocks to invest in.

Comparing it to other high-end manufacturing brands—Boeing, struggling with strikes; General Motors, with stagnant growth; and other industrial robot manufacturers either still in incubation or acquired by Chinese companies—ASML stands alone as a god-tier entity with no competitors. It is the sole provider of high-end lithography machines. The only factor affecting ASML's business is demand, not competition, giving it an exceptionally high economic moat.

Regarding the demand for lithography machines, the current AI wave is far from over. The AI era hasn't fully begun yet, and future chip investments will be massive. Thus, short-term demand fluctuations don't alter the long-term trend. In this context, chip manufacturers' demand for ASML won't stop.

Personally, I believe this pullback presents a good buying opportunity. Driven by TSMC's stellar earnings report and NVIDIA's upcoming earnings, I expect market confidence to rebound quickly, along with ASML's stock price.