IBM Warning Dampens Market Sentiment, ASML Earnings Must Significantly Beat Expectations
Alina Collins
IBM's Q2 miss sent its stock down roughly 25%, cracking confidence in the AI-winner narrative; ASML reports the same day, and analysts say only a clear beat will steady the mood.
What exactly went wrong at IBM?
IBM's Q2 revenue grew only about 1% year-on-year. Adjusted EPS came in at $2.93, missing the $3.02 consensus.
Management blamed a late-quarter budget pivot: enterprise clients redirected spending toward servers, storage, and memory, squeezing software orders. This means → AI infrastructure's "hardware rush" is eating into traditional software budgets in real time.
IBM shares plunged roughly 25% — the worst single-day drop since 1987. This reflects a deeper anxiety: who actually profits from the AI wave?
What is the market watching in ASML's report?
LSEG consensus puts ASML's Q2 net profit at €2.61 billion (up about 8.8% YoY) and revenue at €8.8 billion (up about 14%).
The quarterly numbers themselves are not the main event. The real question is whether ASML raises full-year guidance again. In April it already lifted the annual revenue target range to €36–40 billion.
UBS expects ASML could push guidance to the high end or slightly above. JPMorgan analyst Sandeep Deshpande notes strong DUV — deep-ultraviolet lithography, etching chip circuits with longer-wavelength UV light — shipments, supporting another upgrade.
What matters beyond Q2?
JPMorgan says the most critical question is how management frames the 2027 growth outlook.
Any commentary on 2028-and-beyond capacity planning will draw intense scrutiny. In plain terms = investors want to know not just "are orders strong now," but "how long does this expansion cycle last."
How strong is AI-driven demand?
TSMC, SK Hynix, Samsung, and Micron — ASML's major customers — continue ramping capital expenditure, directly underpinning its order book.
ASML CEO Christophe Fouquet said in April that AI infrastructure spending has created a chip-supply shortage.
ASML is the world's sole volume producer of EUV lithography tools — machines that use extreme-ultraviolet light to etch the finest chip circuits. This means → its order data is a direct thermometer for global fab-expansion appetite.
After IBM's blowup, where is the pressure on ASML?
IBM's miss exposed a structural tension: total enterprise IT budgets are finite, and the rapid build-out of AI hardware is crowding out traditional software spending.
ASML's U.S.-listed shares fell roughly 10% ahead of the July report, signaling a clear shift toward caution.
In plain terms = after IBM reset market expectations, ASML's ability to raise and deliver on full-year guidance is the key test of this AI rally's substance — "meeting" numbers is no longer enough; the market demands a beat.
Content is for reference only, not financial advice.