Why ASML Stock Jumped Today

Shares of the semiconductor equipment company ASML (NASDAQ: ASML) popped today after the company released its fourth-quarter results (ending Dec. 31) that outpaced Wall Street's expectations. ASML's revenue and earnings were both ahead of analysts' consensus estimates, and the company's CEO said today that cheaper AI models could propel the company ahead even further.

ASML's shares rose by more than 7% today and were up by 4.1% as of 11:03 a.m. ET.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. See the 10 stocks »

A better-than-expected quarter

ASML reported fourth-quarter earnings of 6.85 euros per share ($7.14) ahead of analysts' average estimate of 6.72 euros ($7). The company also beat revenue expectations, reporting 9.3 billion euros ($9.7 billion), compared to Wall Street's average estimate of 9.1 billion euros ($9.5 billion).

ASML's semiconductor equipment business is benefiting from an increase in spending by companies building artificial intelligence infrastructure. ASML CEO Christophe Fouquet highlighted this in a press release, saying: "Consistent with our view from the last quarter, the growth in artificial intelligence is the key driver for growth in our industry. It has created a shift in the market dynamics that is not benefiting all of our customers equally, which creates both opportunities and risks as reflected in our 2025 revenue range."

The company expects 2025 sales to be 32.5 billion euros ($33.8 billion) at the midpoint of guidance, which represents a nearly 15% increase from 2024's revenue.

Cheaper AI chips could be good for ASML

In addition to ASML's strong quarterly results, comments made by Fouquet were likely contributing to the stock's gains this morning. After being asked about the impact on ASML from AI start-up DeepSeek, which recently revealed it had developed an advanced AI model with far fewer chips and using less money than its competitors, Fouquet noted that lower-cost AI could be a good thing for his company.

"I don't know exactly what DeepSeek can or cannot do, but I say again, anything that will drive costs down is good news for ASML on the long term," Fouquet said.

ASML's stock tumbled along with other AI stocks earlier this week as some investors worried that artificial intelligence companies may be spending too much money on developing AI models.

But ASML's latest quarterly results show that the company is benefiting from increased AI processor demand and Fouquet's comments should reassure investors that even if cheaper AI models become the norm, his company is still well-positioned to benefit.

Should you invest $1,000 in ASML right now?

Before you buy stock in ASML, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and ASML wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $790,519!*

Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*.

Learn more »

*Stock Advisor returns as of January 27, 2025

Chris Neiger has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends ASML. The Motley Fool has a disclosure policy.