Grupo Santander Downgrades ASML to Underperform Amid Market Reassessment

On Tuesday, analyst Carlos Trevino from Grupo Santander downgraded ASML Holding (NASDAQ:ASML) from an Outperform to an Underperform rating, with a EUR 850 price target. This adjustment reflects a reassessment of ASML’s market position and growth prospects.

A technician in a clean room working on a semiconductor device, illuminated by the machines.

ASML’s financial results for Q1 2025 reported total net sales of EUR 7.7 billion, which were in line with the company’s guidance. Net system sales were EUR 5.7 billion, of which EUR 3.2 billion came from EUV and EUR 2.5 billion from non-EUV. Net income for the quarter was EUR 2.4 billion, which represented 30.4% of total net sales. As of March 31, ASML held EUR 9.1 billion in cash, cash equivalents, and short-term investments.

ASML continues to see strong demand in the AI sector, which is expected to drive growth in 2025 and 2026. The company is also making progress in EUV technology and has achieved milestones in both low NA and high NA platforms to support customer roadmaps and cost optimization. However, ASML experienced a negative free cash flow of EUR 475 million in Q1 due to customer payment dynamics and investments in fixed assets.

ASML Holding (NASDAQ:ASML) provides lithography solutions for developing, producing, marketing, selling, upgrading, and servicing advanced semiconductor equipment systems. It offers lithography, metrology, and inspection systems.

While we acknowledge the potential of ASML to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than ASML and that has 100x upside potential, check out our report about the cheapest AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.