Asml Holding nasdaq Asml Shares Tumble Despite Beating Profit Estimates on Robust Chinese Demand

ASML Holding (NASDAQ: ASML) Shares Tumble Despite Beating Profit Estimates on Robust Chinese Demand

Shares of ASML Holding (NASDAQ: ASML) took a hit on Wednesday, dropping by 5.45%, even as the company reported better-than-expected net profits in the second quarter amid strong Chinese demand.

ASML’s net income for the three-month soared by 35% compared to the same timeframe last year, reaching €1.9 billion (€1 = $1.1218). This exceeded Refinitiv estimates of €1.82 billion, as reported by Reuters. The company’s sales also surged by 28% to €6.9 billion, surpassing expectations of €6.74 billion.

The growth in profits and sales was primarily driven by robust demand in China, a key market for ASML. Many Chinese businesses purchase older equipment as they face export controls on certain advanced chipmaking products. ASML’s lithography systems, crucial in the semiconductor manufacturing process, have gained significant traction in the region.

The positive performance led Europe’s largest tech firm by market value to revise its annual sales growth guidance to 30%, up from the previous forecast of 25%. This news would typically be well-received by investors, but concerns about short-term macroeconomic uncertainties have left some of ASML’s customers across various market segments more cautious.

Despite the uncertainties, ASML remains confident in its business outlook. CEO Peter Wennink stated that the company’s order backlog stands at €38B, providing a solid foundation to navigate the challenges ahead.