ASML, Europe’s most valuable company and the exclusive manufacturer of extreme ultraviolet (EUV) lithography systems, will release second-quarter results on Wednesday amid a fragile AI-led rally in technology stocks. Market participants expect the maker of the roughly $300 million EUV machines to show continued growth, but sentiment is such that only a substantial outperformance will satisfy investors.
LSEG estimates point to an 8.8% rise in second-quarter net profit to 2.61 billion euros and a 14% increase in revenue to 8.8 billion euros. Analysts are also watching for a possible upward revision to ASML’s full-year revenue range, which currently sits between 36 billion and 40 billion euros.
Investor nerves have been exposed by a dramatic move in another technology heavyweight. IBM reported results that led to a roughly 25% drop in its share price after saying it had not kept pace with a shift in corporate spending away from software and toward data-center infrastructure. The company’s forecast for adjusted earnings per share was $2.93 versus consensus expectations of $3.02, on a projected revenue increase of about 1%.
The IBM episode has underscored how quickly markets can re-evaluate the beneficiaries of AI-driven demand trends and has increased the pressure on ASML to deliver a standout quarter.
Across markets, the knock-on effects of macro data and geopolitical developments remain visible. South Korea’s KOSPI surged in Asia, with the index jumping around 8% amid a surprise slowdown in U.S. inflation that reduced expectations for further rate increases and encouraged risk-taking among investors. In intraday ticker movements, ASML was shown up by about +0.97%, IBM by -25.21%, Brent crude futures by +0.78%, and the KOSPI reference by +7.66%.
Energy markets held steady with Brent crude above $85 a barrel, though prices stopped short of fresh highs as traders awaited clarity on how long the Strait of Hormuz might again be blocked to oil tankers. In China, official data showed first-half economic growth slowed to 4.3%, a figure below economists’ projections. The market reaction to that slowdown was muted, reflecting a familiar pattern of export strength paired with domestic softness and a hope that weaker growth could prompt additional fiscal support.
Monetary policy calendars also feature as a near-term influence: the Bank of Canada is widely expected to keep interest rates unchanged later on Wednesday. Market watchers will also be monitoring incoming economic readings such as eurozone industrial production and U.S. producer price index data.
Key developments to watch on Wednesday
- Earnings: ASML, BNY, BlackRock, Johnson & Johnson, Morgan Stanley, United Airlines
- Economics: Eurozone industrial production, U.S. PPI
- Interest rates: Bank of Canada expected to hold rates
- FX: $1 = 0.8744 euros