The stock market generally continued its upward trajectory on Wednesday, although a pullback in tech equities led the Nasdaq Composite to give up its gains for the day. Many investors are looking forward to the end of the trading session, as both Tesla and Netflix are due to tell investors about their latest financial results after the closing bell.
Yet two other companies have already released their earnings today, with implications for both AI stocks and the broader market. ASML Holding (ASML 2.04%) deserves every tech investor's full attention because of its importance to the semiconductor industry, while Goldman Sachs (GS 1.79%) has struggled because of the slowdown in deal activity on Wall Street. Here's what you need to know about these two stocks and why you can't afford to ignore them.
ASML stock falls despite solid results
Shares of ASML Holding were down 5% in early afternoon trading on Wednesday. The move lower for the semiconductor equipment maker came despite strong second-quarter financial results in its latest quarterly report.
ASML's most recent metrics looked solid. Revenue jumped 27% year over year to 6.90 billion euros. Net income rose to 1.94 billion euros, climbing at an even faster 38% pace from year-ago levels. Earnings worked out to 4.93 euros per share.
Artificial intelligence necessitates the most sophisticated semiconductor chip designs, and making those designs a reality requires the deep ultraviolet lithography devices that are ASML's specialty. The Dutch tech giant sold 113 of its lithography systems during the quarter, up from 100 three months earlier, and net bookings for the period weighed in at 4.5 billion euros.
Most importantly, ASML said it expects a continued ramp-up in interest, with guidance for net sales growth approaching 30% for the full 2023 year. That should act as an important catalyst for greater confidence across the tech sector. Yet the stock's decline probably stemmed from concerns about restrictions on semiconductor trade to and from China, which has led to increased levels of uncertainty about macroeconomic conditions and their potential impact on AI-related spending.
Goldman overcomes a tough environment
Elsewhere, shares of Goldman Sachs were up 1.5% Wednesday afternoon. The Wall Street giant reported second-quarter financial results that fell short of some investors' expectations, but overall, it appeared that the company remained on track for a brighter future in the long run.
Goldman's Q2 financial results were weak. Revenue of $10.90 billion was down 8% year over year. That sent net income for common shareholders falling 62% to $1.07 billion, working out to $3.08 per share in earnings.
Goldman's global banking and markets segment took the biggest hit, with revenue falling 14% from year-ago levels. Sales from investment banking activity fell 20%, while fixed-income-related activities saw revenue drop 26%. In addition, incentive fees on asset and wealth management nearly disappeared, although management fees moved higher. Even solid gains on the consumer banking platform weren't enough to offset the hit to Goldman's core business.
Yet despite cyclical issues, CEO David Solomon lauded Goldman's No. 1 position in completed mergers and acquisitions activity, along with record levels of assets under supervision at its wealth management business. As Wall Street continues to bounce back, Goldman expects it will be one of the biggest beneficiaries of more favorable trends in the future.
