The CEO of Dutch chipmaking giant ASML warned investors they needed to get used to more DeepSeek-style “elephants in the room” as he projected optimism days after China’s surprise AI chatbot caused turmoil for Western tech stocks.

The artificial intelligence boom is a two-edged sword for $290 billion ASML . Shares in the Dutch maker of lithograph machines used to make chips soared by 8% on Wednesday thanks to booming demand from semiconductor manufacturers such as TSMC .

I reiterate a 'Buy' rating for ASML with a one-year target price of US$864 per share, driven by AI's continued growth.

Investors will seek reassurance that ASML's AI-dependent growth outlook for 2025 is secure despite a selloff sparked by China's DeepSeek, as the biggest supplier of equipment used to make computer chips ASML reports earnings on Wednesday.

ASML's shares rose by more than 7% today and were up by 4.1% as of 11:03 a.m. ET.

ASML Holding N.V.'s complex, high-cost business model and reliance on a few partners are mitigated by secular trends and continuous R&D investment. Learn more on ASML stock here.

Amid the market torment, DeepSeek has also sparked excitement. By offering powerful yet affordable open-source models, the startup could accelerate the spread of AI’s benefits across the world. For the sector’s established leaders, however, the landscape has been shaken.

DeepSeek’s much-hyped low-cost AI revolution could be a positive for companies supplying the tools for furthering the technology’s adoption,

Top computer chip equipment maker ASML has decided to stop publishing the most closely-watched figure in its quarterly financial results, new order bookings, saying it is too "lumpy" and leads to excessive volatility in its share price.

ASML, a Dutch manufacturer of semiconductor equipment, anticipates that new low-cost versions, such as the one introduced by China’s DeepSeek, would increase rather than decrease demand for AI chips.

Despite a dip in annual net profit, ASML maintained its 2024 sales forecast. China accounted for 27% of Q4 sales but is expected to decline. Market jitters over China’s DeepSeek AI model and U.S. trade restrictions sent ASML’s valuation down €19 billion.