Loading...
ASML drops nearly 3% as a hot stock cools off after a big AI-fueled run
As of May 4, 2026, 4:00 PM ET
Powered by Apex Intelligence
For informational purposes only.
ASML slipped 2.9% today to about $1,386 on fairly normal trading volume. For a stock that just ripped higher in April and was flirting with its 52‑week highs a few days ago, today felt more like a cool-down than a disaster.
So what does this mean for you? If you’re watching or already own ASML, today mainly says: “the story hasn’t changed, but the price got ahead of itself and is now catching its breath.” The business still looks very strong, but the stock is priced for a lot of good news, which makes wiggles like this pretty normal.
ASML fell almost 3% while the tech sector was roughly flat. The stock traded in a wide range during the day and closed below where it opened, which usually means sellers had the upper hand. Volume was close to average, so this didn’t look like panic — more like steady profit‑taking.
Zooming out a bit: over the last month the stock is still up nicely, but over the last week or two it’s given back a chunk of those gains. It recently broke above its short-term trend lines (the 20‑ and 50‑day moving averages) and is now hovering just under them, while still sitting far above its long-term trend (the 200‑day average). In plain English: long-term uptrend intact, short-term momentum cooling.
The recent news around ASML has two very clear themes:
On the business side, it’s hard to overstate how good this is. ASML basically has a monopoly on the most advanced chip‑printing machines, demand is being pushed by AI and cloud spending, and Q1 revenue grew about low‑teens versus last year. Profit margins are fat (it keeps roughly 30% of sales as profit), cash flow is strong, and management has raised future revenue expectations and is buying back a lot of stock.
On the valuation side, several analyses are waving a yellow flag. They point out the shares trade at a very high multiple of earnings (around the high‑30s on forward earnings) and models from places like GuruFocus call it “overvalued” with “little margin of safety.” In simple terms: the market already assumes ASML will keep winning big.
Put together, that makes the stock sensitive. When expectations are sky‑high, even normal days can produce noticeable drops as some investors lock in profits or get nervous about paying top dollar.
The broader market context still leans in ASML’s favor: AI‑linked companies and semiconductor names have led a big rally, and factory data tied to electronics and AI demand has been strong. That supports the idea that ASML’s customers (chipmakers) will keep spending on its tools.
At the same time, inflation is running hot enough that interest rates may stay elevated, and investors are getting more picky about richly priced tech. That shift toward “show me the fundamentals” matters for a stock like ASML that already trades at a premium.
Not advice, but a framework:
What would make things look better? The price stabilizing above the next clear support zone (roughly the mid‑$1,200s to $1,300s), continued strong orders and earnings that grow into the current valuation, and no major negative surprises on export rules or chip‑industry spending.
What would be a warning sign? A sharp break below that support area on heavy volume, signs that chipmakers are pulling back on equipment spending, or new export restrictions that limit where ASML can sell its most advanced tools.
If you care about the long story, the core idea — ASML as the toll booth for advanced chips — is unchanged. What’s moving around right now is mostly how much investors are willing to pay for that story on any given day.
