Shares in ASML dropped over 7% in pre-market trading as the the prospect of more severe US restrictions on its business in China overshadowed better-than-expected second-quarter earnings.
The Dutch group, which supplies semiconductor-making machinery to chip makers, booked €5.57bn ($6.07bn, £4.67bn) in orders in the three months to the end of June, up from €4.50bn a year earlier. Analysts had forecast nearly €5.04bn in orders, according to consensus estimates by Visible Alpha.
Net sales fell 9.5% year-on-year, while net income dropped by 18.7%.
“While there are still uncertainties in the market, primarily driven by the macro environment, we expect industry recovery to continue in the second half of the year,” ASML CEO Christophe Fouquet said in a statement.
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Shares dropped after Bloomberg reported that the US is telling allies, including the Netherlands, it may take unilateral action to restrict exports of chip equipment to China if they fail to do so themselves.
Charles Schwab (SCHW)
Charles Schwab plunged over 10% in Tuesday’s session and was in the red during pre-market trading after the investing giant warned it will have to shrink itself in order to protect profits.
Charles Schwab reported slightly better than expected second-quarter earnings and revenue early Tuesday. The financial services firm ended the quarter with total client assets of $9.4tn.
Q2 revenue increased by less than 1% to $4.69bn with earnings of 73 cents per share, down around 3% compared to Q2 2023.
Net flows into managed investing solutions reached $25bn, up 56% over the year-to-date compared with the first six months of 2023.
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“Client interest in our broad array of wealth solutions remained strong through June. Year-to-date enrolments are up [around] 30% versus the prior year period,” said co-chairman and chief executive Walt Bettinger.
Schwab management revealed in a post-earnings conference call that it is shrinking its banking business to “protect the economics we’re able to generate from owning a bank.”
Shopify (SHOP)
Shopify was in the red ahead of the opening bell after surging over 8% in Tuesday’s session following an upgrade from Bank of America (BoA).
BoA raised its rating on the e-commerce platform to “Buy” from “Neutral” and increased its price target to $82 from $78. Analysts believe Shopify’s revenue growth alongside its disciplined approach to spending will create improved margin growth in the coming quarters.
“Following years of declining margin, we believe that the company has turned a corner on balanced growth and margin, under new CFO Jeff Hoffmeister,” BoA analyst Brad Sills said in a report.
“Revenue growth and disciplined spending point to healthy margin expansion going forward. We forecast 17.4% operating margin for fiscal 2026, up from 14.3% in 2024.”
TSMC (TSM)
Shares in TSMC lost over 4% in pre-market trading after Republican presidential candidate Donald Trump told Bloomberg Businessweek that Taiwan should pay the US for its defence as it does not give the country anything.
TSMC is the world’s largest and most advanced chipmaker responsible for manufacturing chips for major American firms like Apple (AAPL) and Nvidia (NVDA).
“I know the people very well, respect them greatly. They did take about 100% of our chip business. I think, Taiwan should pay us for defence,” Trump said in interview on 25 June that was published on Tuesday.
“You know, we’re no different than an insurance company. Taiwan doesn’t give us anything.”
Taiwan premier Cho Jung-tai, responding to Trump’s comments, said Taiwan and the US have good relations despite the lack of formal ties, and is dedicated to bolstering its own defences.
“Taiwan has steadily strengthened its defence budget and demonstrated its responsibility to the international community,” he told reporters in Taipei, according to Reuters.
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