China and tariffs have wiped off $130 billion of value

More than $130 billion of value has been wiped off of ASML in under a year amid restrictions on exports to China and U.S. tariff uncertainty

Shares of ASML, which is seen as a critical cog in the semiconductor supply chain, hit a record high of over 1,000 euros a piece in July last year for a market capitalization of $429.5 billion, according to data from S&P Capital IQ. That fell to just under $297 billion at the Tuesday close price.

Semiconductor stocks have been volatile since last year due to tightening U.S. chip export restrictions to China and U.S. President Donald Trump’s threat of tariffs on the sector since he took office. ASML and other European semiconductor firms have felt the heat.

“All the equipment manufacturers in the space have come down because they are concentrating all the fears around … the U.S. restrictions to China,” Stephane Houri, head of equity research at ODDO BHF, told CNBC’s “Europe Early Edition” on Wednesday.

Houri also said tariff discussions and debate over whether companies are over-investing in artificial intelligence, bringing up questions over whether “demand is not at the level that many people expect.”

ASML is one of the most important companies in the semiconductor supply chain. It designs tools, known as extreme ultraviolet lithography (EUV) machines, that are purchased by manufacturers like TSMC and are required to make the world’s most advanced chips.

The company recently started shipping the next generation of these machines, known as high numerical aperture, or High NA.

ASML is widely seen as the only company in the world that can produce these EUV machines, giving it a wide moat.

But ASML has never been able to ship its most advanced machines to China, which has cut off potential sales for the Dutch firm. ASML CEO Christophe Fouquet told CNBC in January that, in 2025, he expects the “ratio of our business in China to be lower than what it has been” in 2023 and 2024.

ASML is not alone in facing challenges from tariffs and China. Chip stocks across the world have felt pressure from the uncertainty in global markets linked to China and tariffs.

A trade and tariffs deal between the U.S. and Europe could remove some uncertainty for investors.

“If there is an agreement in the end with President Trump and … Europe and many other countries, they probably will benefit from the relief in the market, and notably in the sector,” Houri added.

Despite the external pressures weighing on ASML, analysts are still relatively bullish on the stock. ASML has a target price of just over 779 euros, according to a average of analyst calls collated by LSEG. That implies around 17% upside from the Tuesday closing price.

This month, Wells Fargo published a note to clients after a meeting with ASML management. The analysts at the investment bank said ASML “remains positive on growth opportunities” in 2025 and 2026, highlighting companies such as Samsung and Intel who are spending on next-generation chipmaking tools.