Semiconductors cheer as ASML says orders more than tripled
Jan. 24, 2024 1:59 PM ET
By: Chris Ciaccia, SA News Editor
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Semiconductor stocks were largely higher on Wednesday, aided in part by Dutch semiconductor company ASML (NASDAQ: ASML), which saw record orders in the fourth quarter.
ASML sales grew 12.5% year-over-year to €7.2B as quarterly net bookings came in at €9.2B. Orders more than tripled from third-quarter levels.
Net profit rose 12.7% year-over-year to around €2B, while gross margin came in 51.4%, down slightly from the 51.9% in the third quarter. Overall, the company generated €7.8B in net income as sales rose 30% year-over-year to €27.6B.
Looking ahead, ASML Chief Executive Peter Wennink said the company is maintaining its conservative view that 2024 revenue will be "similar to 2023."
The company also warned that sales to China, its third-largest market, would be impacted in 2024 by new U.S. and Dutch export curbs.
For the first quarter of 2024, ASML expects net sales between €5B and €5.5B with a gross margin between 48% and 49%.
ASML shares rose more than 10% in mid-day trading while other chip equipment makers such as Applied Materials ( AMAT), KLA Corp. ( KLAC) and Lam Research (NASDAQ: LRCX) all saw gains of 2% or more. Lam Research is set to report its own quarterly figures after the close of trading.
AMD (NASDAQ: AMD) shares gained 5.9% after investment firm New Street Research upgraded the semiconductor company, citing its artificial intelligence potential.
"In a world in which $400bn is spent on AI chips in 2027 (or even $200bn, if adoption plays out more slowly), how much will AMD, Arista, Arm, Broadcom, Infineon, Intel, Micron, Nvidia & [Taiwan Semiconductor] grow revenues in the next 4 years, how does this compare to current expectations, and how much do investors pay for that outlook today?" a team of analysts led by Pierre Ferragu questioned.
"Our analysis shows upside for all names, with AMD and [Taiwan Semiconductor] standing out, at each end of the risk spectrum."
Nvidia ( NVDA), Intel ( INTC), Taiwan Semiconductor ( TSM) and Broadcom ( AVGO) followed AMD higher.
On the flip side, Texas Instruments (NASDAQ: TXN) said weakness in the industrial and automotive spaces continues to persist, impacting analog chip companies.
Texas Instruments fell slightly more than 2% while other analog suppliers, including Analog Devices ( ADI), STMicro ( STM), NXP Semiconductors ( NXPI) and Infineon ( OTCQX:IFNNY) dipped in mid-afternoon trading. |
