The analyst is no longer advising to buy ASML stock. What is his investment before the report?

An analyst at Belgian investment bank KBC has withdrawn his recommendation to buy shares in Dutch semiconductor maker ASML ahead of its quarterly report. It warned that the company risked losing market share due to weak forecasts from one of its key partners, Intel. ASML shares, however, still rose in trading on July 15, as investors were cheered by news that another of its customers, chipmaker Nvidia, was resuming sales of a key product in China.

KBC analyst Thibaut Lene downgraded ASML shares from Accumulate to Hold, reports MarketWatch. Lene also lowered his target price from €703 to €686, which implies a drop of about 3% from the closing price of the company's last trade in Amsterdam and 1.5% from the close of trading of the depositary receipts in New York on July 14.

The analyst warned that ASML could lose market share in 2025 due to delays in the introduction of new EUV lithography systems with high numerical aperture (high NA) - these are advanced facilities for the production of the most advanced chips. He cites weak forecasts from Intel, which remains the Dutch chipmaker's key customer in this area, as the main factor.

In addition, ASML's order backlog is now at a four-year low, emphasizes Lene. According to him, this creates an additional risk of reduction of positions in the market. The only positive factor for ASML may be large orders from Taiwan Semiconductor Manufacturing (TSMC), the analyst believes. He predicts that ASML's new orders will reach €6 billion at the end of the second quarter compared to the consensus forecast of €4.45 billion, MarketWatch notes. However, on earnings per share and revenue, his estimates are slightly below consensus: down 1% and 3%, respectively. If orders do indeed come in above €4.4 billion and the market reacts with a rise in the stock, the analyst sees that as a reason to lock in profits and cut the position. ASML will publish its second quarter 2025 results on July 16.

At the end of trading on July 15 on the stock exchange in Amsterdam, ASML's shares rose by 2.7% to €706 per piece. This was their highest closing price in four and a half months, and the company's market value has risen 4% since the beginning of 2025.

ASML's depository receipts on the Nasdaq exchange also jumped by more than 2% at the moment, and since the beginning of the year they have brought investors almost 18% return. By comparison, the Nasdaq 100 technology index has added half as much over the same period as much. Investors were buying up ASML securities on news that Nvidia, which uses its hardware to make chips, was going to resume sales of a key microchip to the Chinese market, MarketWatch explains.

Last week, Deutsche Bank reiterated a buy recommendation on ASML, and raised its target price from €700 to €750 - 6% above the July 15 close. JPMorgan too reiterated a buy recommendation and target price of €970, which implies the company's securities are up another 37%. The bank noted that the market is cautious about ASML's prospects because more than half of orders for its most advanced systems for 2026 depend on TSMC solutions. However, JPMorgan believes that while the short-term situation remains volatile, ASML has no serious risks in the medium term, as analysts' expectations for the company's 2026 revenue are already 7.7 percent higher than ASML's own forecast.

More than 65% of analysts, who assigned ratings to ASML, advise investors to buy its securities (Buy and Overweight ratings). The rest are neutral with a Hold rating and only one suggests getting rid of the company's securities in the portfolio. Wall Street's consensus target price suggests that ASML's market value could rise another more than 6% over the horizon of the next 12 months.

This article was AI-translated and verified by a human editor