Investors and analysts are looking skeptically at computer chip equipment maker ASML, they said on Wednesday, after the company cut 2025 financial guidance, citing weakness in markets other than AI and delayed orders.

The position of ASML, Europe’s most valuable technology company, as an essential supplier to chipmakers, is not in question. But doubts have emerged over short-term sales, and, for the longer term, whether it can continue to outgrow the overall market.

Tuesday’s change to guidance triggered the biggest selloff in ASML’s shares in two decades.

Shares fell by another 4.9% to 635.60 euros at 0840 GMT on Wednesday.

In July, it had reached an all-time high above 1,000 euros ($1,088) a share, the peak of a decade-long surge based on ASML’s dominance of the market for lithography tools, needed to create circuitry.

ASML’s executives are expected to address analysts on a call later on Wednesday.

A blue line chart showing the share price of ASML from the start of the year to the present day.

After the pandemic leap in demand, ASML said some customers have announced delays of new plants and upgrades, including makers of the logic chips used in smartphones, PCs and other devices.

Manufacturers that make the memory chips that go into them also plan fewer expansions, meaning they can rely on existing equipment for longer.

“There need to be limits to the expectations we investors put in any single company,” said Nick Rossolillo of Concinnus Financial, who has owned ASML stock since 2022.

“That’s especially the case for an upstream equipment supplier highly reliant on the spending plans of its manufacturing customers.”

ASML did not identify which customers were behind the guidance cut, but analysts looked first at TSMC, which makes AI chips for Nvidia and smartphone chips for Apple.

“The strong sales trends at TSMC are a misleading indicator for the overall health of the semiconductor industry,” said analyst Michael Roeg of Belgian investment bank Petercam Degroof.

“TSMC has been spending rather low capex numbers so far this year, and they may do so again next year because their overall (plant) utilisation is not as good as their sales numbers suggest.”

Among ASML customers that make logic chips, Intel said in August it would cut capital spending by $10 billion in 2025, while Samsung has said it faces challenges at the factory it is building in Texas.

Roughly a quarter of chipmakers’ spending on tools goes to ASML, though some analysts say changes in chipmaking techniques could lead that to be lower.

Han Dieperink, chief investment officer at investment firm Aureus, said customer delays are also a negotiating tactic that may force pricing concessions from ASML, squeezing margins.

ASML remained a cornerstone investment, even though Aureus reduced its stake in August on valuation concerns, he said. He also cited declining orders from Chinese chipmakers as US-led export restrictions bite.

“China of course knew the (restrictions) were coming and they front-loaded” purchases in the 2022-2024 period, he said. 

Wine waiters could be replaced by AI after a bot was taught to recognise the taste of liquids.

The “electronic tongue” can tell the difference between Coca-Cola and Pepsi.

And it knows if milk has gone off.

The device uses electrodes to detect the liquid.

Then AI mimicking the brain’s neural network deter-mines what exactly it is.

Experts say it could assess quality, freshness and authenticity of both food and drink.

In tests at Penn State University in the US, it operated with 80 per cent accuracy.

The study said it could see AI tech grade wine and even make recommendations.

Author Saptarshi Das said: “We’re trying to make an artificial tongue, but the process of how we experience different foods involves more than just the tongue.

“We have the tongue itself, consisting of taste receptors that interact with food species and send their information to the gustatory cortex — a biological neural network.” 

When floods ripped through parts of Europe in September, the scale of the destruction took people by surprise. The intense rains should not have, because those had been predicted by sophisticated forecasting systems enhanced with artificial intelligence.

But forewarned did not mean forearmed. Though the rains were accurately predicted, the effects in the deluged areas were not – a fact that highlights the difficulties of dealing with ever more common extreme weather. 

AI has supercharged weather forecasting, using a range of statistical tools to analyse years of historical data and predict patterns, and at a lower cost than traditional numerical weather predictions.

AI technology can create more specific predictions ahead of events such as urban flooding or in complex terrain such as mountainous areas.

For example, Google-funded GraphCast, a machine learning–based method trained directly from reanalysis data, was found to outperform traditional models. Reanalysis data relies on past forecasts rerun with modern forecasting models to provide the most complete picture of past weather and climate.

But there are still gaps in knowledge, in how the information in used and in investment to strengthen data gathering models, experts say.
“In some cases and for some variables, AI models can beat physics-based models, but in other cases vice versa,” said Andrew Charlton-Perez, professor of meteorology at the University of Reading in the UK.

One issue is that the effectiveness of an AI model is only as good as the information it is fed. If there is little input data, or extreme events happen more frequently at different times of the year or in different regions, weather disasters become more challenging to predict.

“A good use of the AI-based weather forecasts would be to complement and enhance our forecasting toolbox, perhaps by allowing us to produce larger ensembles of forecasts that enable accurate assessment and interpretation of the likelihood of extreme events,” Charlton-Perez added.

COMMUNICATION IS KEY

Since January, the European Centre for Medium-Range Weather Forecasts (ECMWF), an independent organisation that provides predictions four times per day to European countries, has been using the Artificial Intelligence/Integrated Forecasting System (AIFS).

This data-driven forecasting model makes multiple predictions rapidly and delivers long-term forecasts of weather events like cyclones and heatwaves. The ECMWF readings ahead of the September floods were accurate, experts say.

Thomas Wostal, press officer for meteorological observatory GeoSphere Austria, told Context/the Thomson Reuters Foundation that their numerical models – including the ECMWF’s predictions – foresaw 300-400 millimeters (11.8-15.7 inches) of rain locally, which came to pass.

But even with accurate forecasts, scientists say communication is key, especially in an era when climate change means extreme weather is becoming more frequent.

“I think what happened with (the recent floods) … is that it’s so rare – a one in 150- to 200-year event – that even if the weather models capture it, there’s a reasonable degree of uncertainty,” said Shruti Nath, a postdoctoral research assistant in predicting weather and climate at Oxford University.

“You have to produce the warning in a way that is communicative, in the degree of severity it could possibly have on people, then people could see the cost of inaction versus the cost of action is actually much greater. So then they would actually put (in) more resources,” she said.

EUROPE BEHIND THE CURVE?

Europe faces urgent climate risks that are outpacing policies and adaptation actions, a report from the European Environment Agency has warned.

Extreme heat, drought, wildfires and flooding will worsen in Europe even under optimistic global warming scenarios and affect living conditions throughout the continent, the EEA says. After the floods, the European commissioner for crisis management, Janez Lenarčič, said the disaster was not an anomaly.

“These extreme weather events that used to be once in a lifetime are now an almost annual occurrence. The global reality of climate breakdown has moved into the everyday lives of Europeans,” he said. Some tech entrepreneurs say Europe is not ready.

Jonas Torland, co-founder of Norway-based 7Analytics, which develops models for predicting floods and landslides, said governments and businesses in the United States had risk managers who were more accustomed to assessing environmental hazards, while in Europe, authorities lacked readiness.

“We often see substantial expenditures with minimal data support for informed decision-making”, Torland, whose models are used in the cities of Oslo, Bergen and Kristiansand, told the Thomson Reuters Foundation.

“While AI is a crucial component of these models, unfortunately, governments are not investing in or purchasing these advanced AI solutions,” he said adding that he believed governments “stick to their old data providers and consultants.”

Data processing is also a challenge because these complex AI models need to run updates every hour as forecasts change.

That requires both a lot of computing power, and a lot of time – especially at more minute scales. A 1-by-1 metre grid, which 7Analytics uses for its predictions, is 100 times more detailed than a 10-by-10 metre grid, but requires more than 100 times as long to process.

High computing power also means huge amounts of energy and water are needed, which makes AI models part of the problem because they are adding to the planet-heating emissions driving the climate emergency.
Some big technology companies, like Microsoft and Google, are exploring the use of nuclear power to run their huge data storage centres.

Other scientists stress that beyond refining their forecasting abilities, authorities need to invest in physical solutions, like developing areas where floodwater can safely be stored, and early warning systems.

They also need to minimise development in flood-prone areas, given the likelihood of more intense climate change-driven floods, and meet their commitments to limit emissions.

“It’s not a question of data or technology or knowledge. It’s a question of implementation, political will,” Friederike Otto, a senior lecturer at Imperial College in London, said in an email response to questions.

“As long as the world burns fossil fuels, the root cause of climate change, extreme weather events will continue to intensify, killing people and destroying homes. To curb this trend, we need to replace oil, gas and coal with renewable energy.”