Dutch manufacturer of semiconductor equipment ASML Holdings NV ASML saw shares plunge over 16% on Tuesday after accidentally releasing its third-quarter earnings report a day earlier than planned.

The company shocked the market by lowering its revenue forecast for 2025, significantly lowering growth expectations. This led to a rapid sell-off as investors digested the impact of weaker demand in key markets.

On Wednesday, shares of ASML extended losses, falling 5% as of 10 a.m. in New York.

Here’s a breakdown of what analysts at Goldman Sachs and Bank of America are saying about ASML’s report and outlook.

Revised sales guide sends shockwaves

ASML’s third-quarter report found that net sales in 2025 are now expected to be in the range of 30 billion to 35 billion euros ($32.7 billion to $38.2 billion).

This represents a cut from the previous forecast of €30 billion to €40 billion. The decline is largely due to weaker-than-expected demand for ASML’s extreme ultraviolet (EUV) lithography machines, which are critical to modern chip production.

Goldman Sachs: Delays in EUV demand impact 2025 outlook

Gross margin estimates have also been downgraded and are now at 51% to 53%, compared to 54% to 56% previously.

Goldman Sachs analyst Alexander Duval said that while ASML’s third-quarter sales were above the midpoint of previous guidance, the 2025 sales revision highlights ongoing challenges in the broader semiconductor market.

The company’s lowered forecast reflects slower-than-expected recovery in several key segments, the analyst said.

ASML now expects to ship fewer than 50 low numerical aperture (NA) EUV systems in 2025, a figure that reflects weaker-than-expected demand, he said.

“We expect investors will look for more color in the momentum for 2026 given some setbacks from 2025,” Duval said. The updated forecast implies a potential 10% reduction in revenue expectations and a 20% decline in earnings before interest (EBIT) compared to previous consensus estimates for 2025, the analyst said.

Bank of America: Multiple headwinds weigh on ASML

Bank of America’s Vivek Arya cited three key factors that contributed to ASML’s downward correction. First, global reshoring efforts and Intel’s delayed foundry expansion plans have weighed heavily on demand, the analyst said.

“Recent investment cuts and delays at Intel suggest that reshoring efforts may not be as successful as initially hoped,” he said.

Second, Arya said China has likely front-loaded its equipment purchases over the past two years in anticipation of rising geopolitical tensions and possible export restrictions. This has created a demand gap in the region that could last until 2025.

Finally, Arya highlighted a growing divergence between AI-related semiconductor demand in computing, networking and high-bandwidth storage (HBM) and non-AI-related markets such as PCs, smartphones and automotive semiconductors, with the latter facing continued weakness.

Despite the revised 2025 revenue forecast, Arya said Bank of America’s preference for AI-related semiconductor companies remains strong.

“Our top picks are still NVIDIA Corp. (NVDA), Broadcom Inc. AVGOAnd Marvell Technology Inc. MRVLas their strong long-term growth prospects are generally unaffected by today’s press.”

Read more:

Photo courtesy of ASML.