The US-listed shares of ASML (ASML.AS), which manufactures lithorgraphy machines that are key to making chips, plunged 16% in Tuesday’s session after the company cut sales forecast.
ASML’s Amsterdam-listed shares were also down 4% on Wednesday morning, following the release of the third-quarter results. ASML posted net sales of €7.5bn (£6.3bn), which was better than previous guidance and said it expected full-year net sales of €28bn for the year, slightly above the €27.6bn it reported for 2023.
However, the company said it expected net sales to rise to between €30bn and €35bn in 2025, which was the lower half of the range that it had provided back in 2022 at an investor day.
Christophe Fouquet, CEO of ASML, said: “While there continue to be strong developments and upside potential in AI, other market segments are taking longer to recover. It now appears the recovery is more gradual than previously expected.”
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ASML also said its results were published earlier than expected on its website due to a “technical error”.
The company’s update led other stocks in the sector lower, with chipmakers Nvidia (NVDA) and Advanced Micro Devices (AMD) both falling.
Danni Hewson, head of financial analysis at AJ Bell, said: “Whilst the AI boom seems to be continuing, demand for other semiconductors has been clobbered by the over exuberance of firms responding to a post-Covid chip shortage and higher borrowing costs which have forced some companies to think hard about their spending plans.”
“ASML’s outlook will force investors to think hard about the potential earning power of other chip makers whilst consumers around the world, but especially in China, are still feeling the impact of an inflation scorcher,” she added.
Nvidia (NVDA)
Hewson said that chip darling Nvidia was one of those stocks “taking a kicking” on the back of ASML’s update, despite having closed Monday’s session at a record high.
She said that Nvidia was “already under pressure after reports the current US president is considering capping exports of advanced chips to some countries, in particular those in the Persian Gulf”.
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“With the AI revolution expected to play such a huge part in upping productivity and enabling other technological advances it’s not surprising the US wants to do what it can to maintain its dominance,” Hewson said. “But with the election hurtling towards us, there will be plenty of debate about how any new administration might want to police this sector.”
Nvidia closed Tuesday’s session nearly 5% lower, denting its strong performance over the past week. The stock hit a share price high of over $138 (£106) on Monday, with its advanced putting it in contention to unseat Apple as the world’s most valuable company.
There has been an abundance of good news around Nvidia, including the company saying last week that its Blackwell AI chips had already sold out for the next 12 months.
Shares in French luxury group LVMH (MC.PA) fell after it reported a dip in sales in results released after the close of the market in Paris on Tuesday.
LVMH was still down more than 4% on Wednesday morning, on the back of it publishing latest sales figures. The conglomerate, whose umbrella of brands includes Louis Vuitton and Dior, reported total revenues of €60.7bn in the first nine months of 2024, which was down 2% on the same period last year.
The company said sales in its wine and spirits business was down 11% to €4.2bn for the period, while revenues in the watches and jewellery segment were 5% lower at €7.5bn. Sales in its fashion and leather goods segment had fallen 3% to €29.9bn.
“In an uncertain economic and geopolitical environment, the group remains confident and will maintain a strategy focused on continuously enhancing the desirability of its brands,” LVMH said.
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Aarin Chiekrie, equity analyst at Hargreaves Lansdown, said that despite this latest dip in sales there were some “diamonds in the rough” in the figures.
“Demand for perfumes and cosmetics helped to mask the scent of a poor showing in other areas,” he said. “Brands like Givenchy and Christion Dior with the world’s leading fragrance, Sauvage, helped pick up some of the slack.”
Chiekrie said this set LVMH apart from its peers: “Its vast stable of blockbuster luxury brands means it’s more diversified and often better able to ride out some of the ups and downs in the market.”
“And while it’s still too early to tell, it’s hoped that China’s ongoing stimulus blitz could market a turning point for luxury companies like LVMH,” he added.
Trading of Trump Media (DJT) shares was briefly halted on Tuesday after the stock plummeted while former president Donald Trump was speaking about his economic policy proposals at the Economic Club of Chicago.
The stock ended the session nearly 10% down, but was up 3% in pre-market trading on Wednesday morning.
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Shares had been rallying after betting markets shifted in favour of a Trump victory in the November election, with prediction sites like Polymarket, PredictIt, and Kalshi all showing Trump’s presidential chances ahead of those of Democratic nominee and current vice president Kamala Harris.
Separately, Trump Media announced the web launch of its Truth+ streaming service on Monday, following on from the release of the streaming app for Android devices last week.
Whitbread (WTB.L)
Premier Inn-owner Whitbread (WTB.L) said that it was raising its dividend and announced another share buyback in results released on Wednesday.
The hotel and restaurant company announced an interim dividend of 36.4p per share in its first-half results, up from 34.1p for the same period last year. Whitbread also announced plans to launch a further £100m share buyback.
That’s despite the company reporting a 13% fall in adjusted profits before tax in the first half of the year, at £340m.
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However, Whitbread said it was making progress on its five-year plan, including a growing presence of in Germany.
As result, the company said that it expected adjusted profits before tax to increase by at least £300m by its 2030 fiscal year versus its current 2025 financial year. In this period, Whitbread also said expected to generate more than £2bn in dividends, share buybacks and “if suitable opportunities arise, additional high-returning investments”.
“To Whitbread’s credit, it is still outperforming the mid-scale and economy hotel markets,” said Russ Mould, investment director at AJ Bell. “That is one reason why investors haven’t punished the company today. The shares are up as it is doing its best in a tough environment.”
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