Can ASML & TSMC Earnings Revive the AI Rally?

, mostly recovering from its Friday losses, as it appears the escalation of the trade war between the US and China wasn't as bad as feared. This allows traders to look forward to major events this week, including the release of two major global tech firms heavily embedded in the AI space: ASML in the Netherlands and TSMC in Taiwan. Traders will be keen to see whether demand for AI tech remains solid, which is likely to push the tech-heavy Nasdaq higher this season.

ASML Winning The Tech Wars

The Dutch tech giant manufactures the machines that produce the high-demand semiconductors that are causing some of the geopolitical consternation riling the market these days. ASML's fiscal second-quarter earnings are scheduled for Wednesday ahead of the market open. Analysts expect the firm to , with revenues rising 5.8% to €7.90 billion year over year. Investors are likely to focus on booking figures to gain better insight into demand dynamics in the semiconductor industry.

Bookings tend to fluctuate widely from quarter to quarter, depending on how much chipmakers commit to spending on expanding production. The recent trade tensions between the US and China, which have restricted semiconductor trade between the two economic heavyweights, are expected to affect ASML's earnings. Last quarter, the company to €7.09 billion from €3.94 billion. The company didn't guide bookings but said it expects Q2 sales between €7.2 billion and €7.7 billion and targets revenue of €30 billion to €35 billion for the whole year. Recently, the company announced the appointment of a new Chief Technology Officer, a €1.3 billion investment in Mistral AI, and its intention to integrate its models into the lithography process.

TSMC Maintains Upward Trajectory

The semiconductor manufacturer at the centre of the US-China dispute will report its fiscal third-quarter earnings on Thursday. Markets already have some idea of what to expect after the company reported its to NT$989.9 billion, above the market's estimate of NT$973.3 billion. However, that is roughly in the , suggesting it is on track to meet its outlook. While that's usually positive for most companies, the exuberance of the tech sector often means that merely beating expectations within the company's guidance isn't enough to push the stock further.

Following its sales release, TSMC's share price hit a new record high, capping a 34% rise so far this year. Traders will be closely watching how tariff-related tensions affect the company's sales and profitability. Earlier in the year, in the US to build out production capacity to meet the Trump Administration's requirement that at least half of its semiconductor manufacturing be in the US. In its prior earnings report, the company provided a positive outlook for the AI sector, noting strong demand for leading-edge process technology. Traders hoping the AI-fuelled tech surge continues will likely want that guidance reiterated.

Nasdaq Forming Dead Cat Bounce Pattern?

Nasdaq had formed a terminal wedge pattern and a double top at 25195 while losing momentum before crashing on Friday, leaving behind a double bottom at 24210. Despite rising to the golden pocket near 24820 since tumbling, failing to overcome the resistance would suggest a dead-cat bounce, opening the door to 23840 and 23600. On the other hand, breaking past the Fibonacci level and the 25k handle would expose the record peak once again and subsequently the next major resistance at 25250.

Source: SpreadEx | US Tech 100, 4-hour chart