Semiconductor Stock Round-up: ASML beats on EPS, Nvidia supplies Nio EVs, Intel's Mobileye IPO looks grim

• ASML beat Q3 consensus on both EPS and revenue.
• Nvidia is now producing the main chip system for Nio's autonomous driving systems.
• Lam Research reports earnings after the close.
• Intel has little to look forward to with Mobileye IPO valuation.

ASML Holding (ASML) stock has added 6% in Wednesday's morning session after the Netherlands-based semiconductor production equipment maker produced earnings well ahead of expectations. ASML reported Q3 earnings per share (EPS) of 4.29 euros ($4.20), while Wall Street consensus had been $3.53. Shares are trading at $424.51 at the time of writing.

Nvidia (NVDA) is back in the news as its chips are powering the new fleet of Nio (NIO) vehicles unleashed on four European markets in the past week. Elsewhere Intel (INTC) seems to be suffering from a lack of interest in its Mobileye spin-off, and Lam Research (LCRX) reports earnings after the close.

ASML earnings news

ASML also surprised the market by clearly stating that management did not see new US restrictions on advanced semiconductor technology exports to China as being a major obstacle in its way. Analysts had previously named ASML, Intel and Lam Research as the firms most likely to face weakness due to the new export curbs. 

Wall Street forecasts for $5.3 billion in Q3 revenue were easily surpassed with results of 5.8 billion euros ($5.67 billion) in sales. 

“There is uncertainty in the market due to a number of global macroeconomic concerns including inflation, consumer confidence and the risk of a recession. While we are starting to see diverging demand dynamics per market segment, the overall demand for our systems continues to be strong,” said CEO Peter Wennink.

Analysts were especially impressed by a gross margin of 51.8%, well above the midpoint guidance of 49.5%. Record net bookings of 8.9 billion euros also added a separate positive outlook for the future. For the fourth quarter, ASML is guiding for between 6.1 billion and 6.6 billion euros of revenue, which is well above the year-ago figure of just under 5 billion euros.

Semiconductor stock news

Nvidia's new NVIDIA DRIVE Orin chips are a major piece of the AI puzzle for Chinese upstart's new models debuting in Europe this past week. After only being available in Norway and China until now, the perceived future Tesla (TSLA) competitor is now offering three different models in Germany, The Netherlands, Sweden and Denmark. For their limited autonomous driving systems, Nio is using four Nvidia DRIVE Orin systems-on-a-chip to handle such needs as battery swapping and autonomous parking. The systems also help with AI-guided expressway handling. 

Nio is producing the ET7, ES7, and ET5 models for the European market, all of which have already been best-sellers in the Chinese market. NIO is also availing the vehicles in subscription models rather than as pure bank-financed outright dealership sales.

Lam Research is benefiting from ASML's powerful quarter and guidance. Shares of the semiconductor equipment manufacturer are up 1.7% on Wednesday ahead of its fiscal Q1 earnings anticipated after the close. Wall Street is expecting $9.51 in GAAP EPS on revenue of $4.91 billion. All 17 analysts have upgraded their forecasts for the quarter. The average Wall Street price target on the stock is $477, while shares are trading closer to $328.

Intel just cannot catch a break. After originally shooting for a $20 billion spinout of its Mobileye autonomous driving unit as a standalone public company, rumors emerged Tuesday that Intel will now consider a valuation of $14.4 billion to $16 billion. When Intel first brought up the idea of IPOing the internal unit that it had previously acquired for $15.3 billion in cash in 2017, management thought it could fetch $50 billion. Now the market has completely shifted, and interest in the IPO has markedly waned.

Mobileye is expected to sell $820 million worth of shares at its debut for a price between $18 and $20. The company will trade under the ticker MBLY. 

ASML stock forecast

ASML stock seems to have bottomed last week around $363. The weekly chart below shows that ASML shares are now in an updraft with the rest of the market and approaching the 8-week moving average at $440. The trendline that has been descending all year sits near $500 and should provide both a bullish target and point of resistance. Above there the 30-week moving average offers further resistance. Right now the Relative Strength Index (RSI) is below the midpoint. Crossing over that midpoint – 50 – will give bulls further reason to hold out for a bigger gain.

ASML weekly chart