ASML Q4 report eased investor concerns after DeepSeek panic

Translation: Original published in Finnish on 1/29/2025 at 11:17 am EET.

ASML, which has a virtual monopoly on EUV lithography machines, reported its Q4 results on Wednesday, which clearly exceeded analyst expectations in terms of orders. The outlook for this year, already given last October, has been reiterated, so in the big picture, 2025 is shaping up as anticipated. The company continues to see strong long-term growth prospects for the semiconductor sector, driven by AI investment and other factors, in line with its Investor Day in November. This also creates significant growth opportunities in the coming years for Canatu, which is in our coverage.

Q4 report eased investor concerns after DeepSeek panic earlier this week

ASML's Q4 revenue increased 28% to 9.3 BNEUR and EBIT was 3.4 BNEUR, beating analyst consensus expectations of 9.0 BNEUR and 3.1 BNEUR, respectively. Moreover, orders received in the quarter (7.1 vs. 3.5 BNEUR) were clearly stronger than expected. According to the company, AI investments in particular are reflected in the growth figures. 

For 2025, the company’s revenue guidance is 30-35 BNEUR (2024: 28.3 BNEUR). According to the company, the rapid changes in the AI market will not treat its customers equally, creating both opportunities and threats for different players. Partly because of this, the revenue range for the current year is relatively wide.  

Semiconductor stocks were under heavy pressure at the beginning of the week, as DeepSeek, a Chinese open-source AI, made headlines over the weekend. The model was trained with much less computing power compared to the huge investments made by the tech giants. This raised questions about the level of investment needed in the future, which was also reflected in ASML's share price. However, the stock reacted strongly to the earnings report, which clearly allayed the concerns raised earlier in the week. It is also quite possible that the efficiencies offered by DeepSeek will only accelerate the development of AI and extend it to new applications. This is likely to further expand the market in the longer term.  

We do not see this week's news as having any immediate impact on Canatu's longer-term growth prospects, which are still subject to a wide range of scenarios, including those outlined in our Initiation of coverage report.