ASML Stock Q3 2025

Earning call

2025 Q3

The Price has shot up since Q1 of 2025, Which is great for our returns, but also means that risks have increased since then and the potential rewards have diminished if the fundamentals haven’t changed.

So that’s what we have to find out, has the situation changed ? Or is it just a change in sentiment and we have to rebalance our position.

For memory here was our valuation :

Net income and revenue continue to see and follow the same increase as in Q1 and Q2.

Guidance confirms our hypothesis for the year that we had for Q1 and Q2. Which is good. (And as they had said in Q2 revenue will be skewed towards last quarter than this quarter). Furthermore TSMC continue its capital expenditure and great results which is good for ASML future numbers :

I like that, it means that they bought shares when the price was low in the dip and now that the price has increased they are halting the buyback program for now which shows good capital allocation from management. So good news.

It’s crazy how management is saying the same thing but differently and the reaction from the market is totally different. This quarter the stock price increased but for memory in Q2 2025 here what management said and what was the reaction of the market :

“Looking at 2026, we see that our AI customers’ fundamentals remain strong. At the same time, we continue to see increasing uncertainty driven by macro-economic and geopolitical developments,” Fouquet said in an earnings release. “Therefore, while we still prepare for growth in 2026, we cannot confirm it at this stage.”

Which is basically saying the same thing but differently and we have completely different market reactions which is surprising.

Now that is interesting as it can open another potential growth path with advanced packaging which can potentially further increase revenue. So I would say news that deserves an increase in price but not a 50% increase in my opinion.

We also have an investment in Mistral AI this quarter which is interesting but we will have to see how it pans out. Could be a point that brings exuberance to the stock price with the AI craze so who knows. But I like that management gives themselves this option as it doesn’t come at such a great cost to them and provides them a potential advantage to increase their moat, to follow.

For me the situation hasn’t changed drastically although the situation did improve a bit in my opinion but we have seen a 50% increase in price, and it is a big increase. Which as said previously great for returns but changes the risk reward equation. As such at that price, I’ve already made a 50% return in a short time and am happy with the return but I am happy with what management is doing and I still want to be invested in the company.

So I’ve decided to reduce my position as I see other better opportunities right now in the market more interesting but as I like the company for the long term and it is a hold right now for me, I’ll decrease my position to ⅓ of what it was as ASML has taken a place too big in my portfolio. But I’ll stay invested for the long term with this position unless the situation or the price changes drastically from this point.