Markets
markets
Luke Kawa

Semiconductor industry keystone ASML tumbles after saying growth in 2026 isn’t guaranteed

Shares of ASML, the second-biggest company in Europe and a critical choke point in the semiconductor design process, are tumbling despite second-quarter results that surpassed every analyst’s estimates for both the top and bottom lines.

That’s because the Dutch company cautioned that it was unsure whether it would be growing next year, and said that revenues in the third quarter would come in between 7.4 billion euros and 7.9 billion euros. The Street was looking for something in the realm of 8.2 billion euros (1 EUR roughly = 1.16 USD).

The stock was recently down 8% in premarket trading.

“Looking at 2026, we see that our AI customers’ fundamentals remain strong,” President and CEO Christophe Fouquet said. “At the same time, we continue to see increasing uncertainty driven by macroeconomic and geopolitical developments. Therefore, while we still prepare for growth in 2026, we cannot confirm it at this stage.”

That’s walking back a statement made in the Q1 results from April, when Fouquet said that conversations with customers supported management’s expectation that 2025 and 2026 would be “growth years.”

Investors are increasingly looking forward to and pricing in expected 2026 results, RBC Capital Markets Chief US Equity Strategist Lori Calvasina said earlier this week, and the AI boom is a massive driver of S&P 500 earnings growth. This warning from ASML, however, must be balanced against the myriad commitments from the leaders of US megacap tech companies — like Meta’s Mark Zuckerberg — that their spending spree is poised to continue.

For what it’s worth, ASML’s pipeline does seem solid. Net bookings (the value of new contracts signed) surprised to the upside for both its extreme ultraviolet lithography machines (or EUV, needed for the most advanced AI chips) as well as its non-EUV equipment.

But CFO Roger Dassen said that clients are waiting to learn more about tariffs and export controls before making more purchasing commitments.

More Markets

See all Markets
markets
Max Knoblauch

Southwest reports lower-than-expected Q1 earnings and revenue, declines to offer full-year profit update

Southwest Airlines reported its first-quarter earnings after the bell on Wednesday. Its shares fell more than 6% in after-hours trading.

For the first quarter, Southwest reported:

  • Adjusted earnings of $0.45 per share, compared to the $0.47 per share expected by Wall Street analysts polled by Factset.

  • Revenue of $7.25 billion, compared to estimates of $7.27 billion.

The carrier guided for adjusted earnings of between $0.35 and $0.65 per share for its second quarter, a range whose midpoint is below analyst estimates of $0.53 per share. Regarding its full-year 2026 earnings estimate of “at least” $4 per share, Southwest declined to give an update “given the ongoing macroeconomic uncertainty.”

“Achieving this outcome would require lower fuel prices and/or stronger revenue performance to offset higher fuel expense,” Southwest said.

Southwest introduced bag fees last year, ending a more than five-decade-long “bags fly free” policy. Earlier this month, less than a year after the change, it joined its major US rivals in hiking its bag fees by $10 amid surging jet fuel prices.

Southwest, which discontinued its fuel-hedging program last year, said it spent $1.36 billion on fuel and related taxes in the first quarter, up 8.6% year over year.

markets
Matt Phillips

ServiceNow dives after reporting sequential decline in profit margins

Cloud software giant ServiceNow — which has been something of a poster child for the AI-related software sell-off — saw its shares fall sharply after delivering Q1 results that included a quarter-on-quarter decline in profit margins.

The company reported:

  • Revenue of $3.77 billion, higher than the $3.75 billion analyst consensus estimate published by FactSet.

  • Diluted adjusted earnings of $0.97 per share, on point with the $0.97 analysts had expected.

  • Subscription revenue of $3.67 billion vs. the $3.65 billion predicted.

  • Non-GAAP gross margins of 79.5%, down from 80.5% in Q4.

ServiceNow issued guidance for Q2 subscription revenues of between $3.815 billion and $3.820 billion, compared to the $3.75 billion FactSet consensus estimate.

ServiceNow shares have been at the epicenter of the software sell-off driven by the fear that such companies are at risk of being rendered obsolete by AI. The stock was down 33% for the year through the end of the New York trading session on Wednesday.

markets
Matt Phillips

IBM falls despite posting better-than-expected Q1 results

Big Blue fell in after-hours trading despite reporting better-than-expected Q1 results, as it didn’t include in the release an internal metric it typically discloses to track the progress of its AI business. IBM reported: 

  • Q1 revenue of $15.92 billion vs. the $15.63 billion FactSet consensus estimate.

  • Adjusted earnings per share of $1.91 vs. the $1.81 consensus expectation.

  • Sales of $7.05 billion at its key, high-margin software segment vs. a $6.98 billion consensus of nine analyst estimates.

  • Sales of $3.33 billion in its infrastructure unit, which houses its growing AI mainframe business, vs. a $3.13 billion consensus estimate.

Unlike recent earnings statements, the company made no mention of an internal metric it used to track its progress in AI, which it called its “generative AI book of business.” That metric stood at $12.5 billion at the end of 2025, per the company.

The infrastructure business is of acute interest to the market, after AI giant Anthropic announced in February that Claude Code could efficiently modernize code bases in the COBOL programming language, which serves as a cornerstone of IBM’s enterprise mainframe business. The language is still widely used in certain industries, such as airlines and finance. (ATMs, for instance, run almost entirely on COBOL.) 

Anthropic’s COBOL announcement cut the legs out from under IBM. The stock plunged 13% on February 23, the day of the announcement — its worst daily drop in more than 25 years. And it was down roughly 15% for the year through the end of trading Wednesday.

Rani Molla
2h
Tesla Q1 earnings and revenue beat Wall Street’s estimates

Tesla reported earnings after the bell Wednesday.

Tesla Showroom Displays Model Y And Optimus Robot Visual In Shenzhen
Tasha Matsumoto
2h
Stocks close at new record high as US extends ceasefire with Iran

The mood was risk-on as traders bought Big Tech, AI names, and speculative stocks.

Bull

Latest Stories

Sherwood Media, LLC produces fresh and unique perspectives on topical financial news and is a fully owned subsidiary of Robinhood Markets, Inc., and any views expressed here do not necessarily reflect the views of any other Robinhood affiliate, including Robinhood Markets, Inc., Robinhood Financial LLC, Robinhood Securities, LLC, Robinhood Crypto, LLC, Robinhood Derivatives, LLC, or Robinhood Money, LLC. Futures and event contracts are offered through Robinhood Derivatives, LLC.
©2026 Sherwood Media, LLC