On Thursday, Deutsche Bank adjusted its price target on ASML Holding NV (AS:ASML:NA) (NASDAQ: ASML), a key player in the semiconductor industry, reducing it to €825.00 from the previous €950.00. Despite this change, the firm maintained its Buy rating on the stock.
The adjustment comes as the market anticipates ASML's third-quarter results, which are expected to reflect significant impacts from key clients, including Intel (NASDAQ:INTC), China, and Samsung (KS:005930)'s foundry business. These factors are projected to lead to lower than initially expected results for the year 2025, with sales forecasts revised down by €2.5 billion to €31.6 billion, compared to the company's guided range of €30-35 billion.
The analyst from Deutsche Bank noted that while a reduction in gross margin was anticipated, the extent of Samsung's cutbacks in both its memory and foundry segments was not foreseen. This unexpected development prompted further adjustments to ASML's 2025 sales and earnings per share (EPS) estimates, with a 12% reduction in the latter.
The report also highlights potential delays in Samsung's qualification by Nvidia (NASDAQ:NVDA) for HBM3E until the following year, indicating packaging challenges with Samsung's TC-NCF process. Samsung's continued investments during the previous DRAM downturn have possibly led to excess DRAM capacity, which may be contributing to the current spot price pressure in DDR5 memory and a broader desire to balance supply and demand in the memory sector.
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