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
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