Nvidia Supplier ASML Beats Q4 Earnings Estimates, CEO Says 'AI Is Key Driver For Growth:' Buy, Sell, Or Hold? Here's What Technical Analysis Suggests

ASML Holding NV ASML, a Dutch lithography equipment supplier to Nvidia Corp. NVDA, fell over 6.6% in the last two days following DeepSeek’s emergence. However, it beat fourth-quarter earnings estimates. Here's what technical analysis and analyst ratings suggest.

Earnings Snapshot: ASML reported its record fourth-quarter revenue of €9.3 billion or $9.71 billion beating analyst estimates of $9.020 billion by 7.6%, according to Benzinga.

It reported basic earnings of €6.85 or $7.15 per share, 6.55% above estimates of $6.71.

The company projects its 2025 total net sales to be between €30 to €35 billion or $31.32 to $36.54 billion. “ASML achieved another record year, ending with total net sales for 2024 of €28.3 billion ($29.54 billion), and a gross margin of 51.3%,” said its CEO, Christophe Fouquet.

“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,” added Fouquet

What Happened: As DeepSeek gained prominence over the weekend, emerging as the top application on Apple Inc.’s AAPL store, Big Tech, and AI-linked stocks were battered on Monday before staging a rebound on Tuesday.

Shares of ASML declined by 6.68%, whereas its U.S. client Nvidia dropped 9.56% in the two trading sessions this week. This compares to a 1.48% fall in Invesco QQQ Trust ETF QQQ which tracks the Nasdaq 100 Index in the same period.

From a technical perspective, the analysis of daily moving averages indicates a bearish downtrend after a two-day fall.

Shares closed at $683.35 on Tuesday, which was below the eight-day and 20-day simple moving averages, of $736.04 and $730.25 per share, respectively. As per Benzinga Pro data, its current stock price was also lower than the 50 and 200-day moving average prices at $711.04 and $842.11 per share, respectively.

This trend indicates the stock is experiencing below its shorter and longer-term price movement, indicating downward pressure. However, the relative strength index of 37.68 suggests the stock was in a neutral zone but moderately oversold suggesting a possibility of a rebound from the lows.

What Are Analysts Saying: While DeepSeek development led to the semiconductor selloff, Nvidia, despite falling 17% on Monday and erasing $589 billion in market capitalization appreciated the Chinese AI firm’s work using its H800 chips.

As AI inferencing is the next step in developing AI after achieving peak AI model training, Nvidia said, “Inference requires significant numbers of Nvidia GPUs and high-performance networking”. This indicates a positive development for NVDA’s supplier ASML.

Microsoft Corp. MSFT CEO, Satya Nadella cited Jevons Paradox and said in an X post, “As AI gets more efficient and accessible, we will see its use skyrocket, turning it into a commodity we just can’t get enough of.” The Jevons paradox is the idea that increased efficiency can lead to increased consumption, rather than conservation.

According to Benzinga, ASML has a consensus price target of $880 per share based on the ratings of 13 analysts. The average price target of $814 apiece between Wells Fargo, Bernstein, and Bernstein implies an 18.06% upside.