Shares of ASML Holding NV were lower in Friday's late trading, on track to snap a six-session advance. The stock was down approximately 3.8% to $209.39, pressured by a broad sell-off in semiconductor stocks and renewed concerns over the macroeconomic outlook.
Prior to this decline, ASML had performed strongly, rallying 9.5% over the past six trading days. Year-to-date, the stock is up about 59%, significantly outpacing the S&P 500's 11% gain over the same period. This robust performance was primarily fueled by surging demand for AI infrastructure and a trend of new factory investments driven by memory chip shortages.
However, market sentiment shifted on Friday. Data from the U.S. Bureau of Labor Statistics showed the economy added 172,000 nonfarm payrolls in May, far exceeding economist expectations of 80,000, while the unemployment rate held steady at 4.3%. The strong jobs report reinforced market expectations for further interest rate hikes by the Federal Reserve. According to the CME FedWatch Tool, the perceived probability of a rate hike by year-end surged from 48% to over 60%. Against this backdrop, technology stocks faced a broad sell-off. The Philadelphia Semiconductor Index fell more than 5%, with major chipmakers including Nvidia, TSMC, and Broadcom all recording significant declines.
From a fundamental perspective, ASML has recently received positive news. TSMC's Chairman, C.C. Wei, confirmed at the shareholder meeting that the company has purchased ASML's latest High-NA EUV lithography equipment to prepare for its A14 and more advanced manufacturing processes. This high-numerical aperture extreme ultraviolet tool is set to be crucial for the A14 process and beyond, indicating TSMC is positioning itself early for competition in the post-2-nanometer era.
Wall Street institutions generally maintain an optimistic view on ASML's prospects. JPMorgan recently raised its price target for ASML from $1,813 to $2,200, reiterating an Overweight rating. The firm believes market earnings expectations for 2027 and 2028 are too low and that ASML could supply more EUV tools than previously anticipated. Data shows that among the 38 analysts covering the stock, 34 have a Buy or equivalent rating, only four suggest Hold, and two have a Sell rating. However, some analysts note that ASML faces challenges such as export restrictions and increasing bargaining power from major customers, which could lead to insufficient growth momentum in the coming quarters.
Analysts suggest that as the world's sole supplier of EUV lithography machines, ASML holds an irreplaceable strategic position in the wave of AI computing infrastructure. The recent pullback in its share price is seen as reflecting shifts in macro sentiment and capital rotation rather than a deterioration in its underlying fundamentals.
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