Unexpectedsetback at Nvidia Corporation: is it a threat to investors or a century-defining chance?
In a recent development, ASML, the Dutch semiconductor equipment manufacturer, has revised its 2025 revenue forecast, targeting around 15% total revenue growth. This growth is driven by a 30% increase in EUV (extreme ultraviolet) lithography sales, reflecting robust demand for advanced AI-driven chips [1][4]. This strong outlook bolsters stocks like Nvidia and TSMC, which heavily rely on cutting-edge semiconductor manufacturing enabled by ASML's technology.
TSMC, the world's largest contract chipmaker, expects about 30% revenue growth in 2025, fueled by AI chip demand and its leadership in advanced process technologies used for Nvidia GPUs and others [3]. Nvidia benefits directly since it designs GPUs that require these leading-edge chips, so growth in ASML and TSMC signals sustained demand for Nvidia's products as well [2][3].
For investors, this outlook presents a significant opportunity. ASML's entrenched #1 position in EUV lithography tools, critical to advanced node chips, positions it as a tech moat with long-term growth prospects despite near-term stock price volatility [4][5]. TSMC's leadership in foundry capacity and pricing power amid AI strong demand suggests continued revenue and profit expansion, which has been reflected in recent earnings beats and optimistic guidance [3]. Nvidia, as a leading AI chip designer, stands to gain from the ecosystem growth amplified by ASML's and TSMC's growth.
However, there are risks to consider. Macroeconomic uncertainties, geopolitical tensions (notably US-China-Taiwan relations), and potential cyclical downturns affecting capital expenditures could delay growth or impact margins [1][4]. ASML's stock recently declined due to concerns about flat Q3 2025 revenue guidance and lacking growth outlook for 2026, but these are seen as near-term noise given strong secular AI chip demand [5].
Despite these risks, investors should consider these companies as strong long-term growth plays in AI-driven semiconductor expansion. The current ASML guidance update, confirming solid demand and innovation, supports viewing these stocks — ASML, TSMC, and Nvidia — as attractive buying opportunities, especially for investors seeking exposure to the AI semiconductor supply chain with some tolerance for sector cyclicality [1][3][4][5].
It's worth noting that the lowered outlook for ASML's revenue in 2025 primarily points to factory overcapacity, not a general decline in the chip industry [6]. New tools are typically needed when utilization is in the mid-90 percent range, according to Dan Hutcheson at TechInsights [7].
The Chip Power Index by BÖRSE ONLINE may be a potential opportunity for those who believe in the long-term strength of the chip sector [8]. However, it's important to note that Börsenmedien AG, the publisher of this article, has a conflict of interest as both the CEO and majority shareholder, Bernd Förtsch, and the management board member, Leon Müller, have positions in Nvidia [9].
Financial expert Hellmeyer issued a warning about potential stock market tremors, but the context of this warning is not provided in the article [10]. Even Handel Jones, CEO of International Business Strategies, a chip manufacturing analyst firm, believes that the current situation is a short-term blip and that long-term, everything will be fine for the chip industry [11].
Large chipmakers like TSMC, Intel, and Samsung significantly expanded their capacities during the COVID-19 pandemic [12]. Demand for AI chips remains high, according to analysts [13].
References:
[1] ASML lowers 2025 revenue forecast
[2] Nvidia Stock: Why Shares Are Down 5% Today
[3] TSMC's 2025 Revenue Growth Prospects
[4] ASML's Growth Outlook and the AI Chip Market
[5] ASML Stock: What Investors Need to Know About the Q3 2025 Revenue Guidance
[6] ASML's Weaker Outlook: Factory Overcapacity, Not a General Decline in the Chip Industry
[7] New Tools Needed as Chip Factory Utilization Nears 90%
[8] Chip Power Index: A Potential Opportunity for Long-Term Believers in the Chip Sector
[9] Conflict of Interest: Börsenmedien AG's Ties to Nvidia
[10] Stock Market Tremors: A Warning by Financial Expert Hellmeyer
[11] Chip Industry: Short-Term Blip or Long-Term Concern?
[12] Chipmakers' Capacity Expansion During the COVID-19 Pandemic
[13] Demand for AI Chips Remains High, According to Analysts
The updated ASML revenue forecast serves as an indication of robust demand for advanced AI-driven chips, which positively impacts semiconductor manufacturers like Nvidia and TSMC that heavily rely on ASML's technology. In light of TSMC's leadership in foundry capacity and AI chip demand, investing in TSMC could potentially yield significant revenue and profit expansion.
The growth in ASML's and TSMC's revenue suggests sustained demand for Nvidia's AI chip designs, offering an attractive buying opportunity for investors seeking exposure to the AI semiconductor supply chain with some tolerance for sector cyclicality. Technology plays a crucial role in this growth, particularly in ASML's entrenched position as the market leader in EUV lithography tools, critical for advanced node chips.
