Why ASML Stock Lost 18% in July

ASML sold off at the beginning of the month on reports that Anthropic was going to launch its own AI chip.

The company beat estimates in its second-quarter earnings report, which briefly lifted the stock.

Towards the end of the month, a report on new competition from China weighed on the stock.

Shares of ASML (NASDAQ: ASML) were pulling back last month amid a broader sell-off in AI stocks and as the company reported second-quarter earnings, which briefly lifted the stock, though that wasn't enough to drive gains over the course of the month.

According to data from S&P Global Market Intelligence , the stock finished the month down 18%. As you can see from the chart below, the stock fell early in the month on competitive concerns, and then slipped again at the end of July on reports that China is making its own ultraviolet lithography machines, potentially competing with ASML.

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Like other AI stocks , ASML kicked off the month with a sharp sell-off on news that Anthropic is doing early stage work on its own AI chip, according to The Information , though the inclusion of ASML in the broaders chip sell-off was odd.

ASML is a maker of extreme ultraviolet (EUV) lithography machines, which are used to make the most advanced chips, so it doesn't have the same exposure to that competition that a chipmaker would. However, investors may be betting that Anthropic could put pressure on ASML's customers, such as Micron, by hurting demand, which would in turn hit ASML's business. The stock fell 7.4% on July 1 on the news.