Dutch semiconductor company ASML Holding (ASML) was picked as the top European semiconductor pick by analysts at UBS, while raising the stock’s price target from €1,600 to €1,900. The analysts, led by Francois-Xavier Bouvignies, see the company offering an attractive risk/reward profile in the European chip sector.
UBS analysts are optimistic about a number of things in ASML, making it appealing. First, UBS believes the market is overly pessimistic about the company's inability to produce enough tools to meet industry demand. Analysts estimate ASML’s 2027 capacity can support more than 50% year-over-year (YOY) growth in leading-edge wafer output.
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Secondly, ASML has solid exposure to the memory market, with roughly 30-35% of revenues expected to be tied to memory by 2026. UBS analysts consider this aspect to be an underappreciated growth driver for the company.
Finally, ASML’s High NA EUV next-generation lithography technology could lead to 20%-40% cost savings on critical layers compared with alternative patterning approaches. Analysts also see adoption of the technology within two to three years.
As UBS predicts a robust outlook for ASML, we look more closely at the chip equipment giant…
About ASML Holding Stock
ASML Holding is a Dutch company that manufactures advanced semiconductor equipment. It designs, builds, and services highly complex systems that help chipmakers create smaller, faster, and more efficient chips. The company works closely with its customers through engineering, manufacturing, installation, and maintenance support.
Its headquarters is in Veldhoven, the Netherlands. ASML plays a central role in the global chip supply chain because its technology is essential for producing cutting-edge semiconductors used in electronics, computing, and communications. The company has a market capitalization of $573.97 billion.
The main drivers behind ASML’s stock performance are strong AI-related chip spending, its dominant position in EUV lithography, and improving visibility. The stock also benefited from broader enthusiasm for semiconductor equipment as AI data centers and advanced chip production continue to expand.
Over the past 52 weeks, the stock has gained 122.19%, while it has been up 53.83% year-to-date (YTD). The company’s shares reached a 52-week high of $1,603.49 on May 14, but are up 2.6% from that level presently.
www.barchart.com On a forward-adjusted basis, ASML’s price-to-earnings ratio of 41.78 times is higher than the industry average of 31.86 times.
ASML Holding’s Q1 Earnings Show Strong Demand for Advanced Chipmaking Tools
For the first quarter of fiscal 2026, ASML’s total revenues increased 13.2% YOY to €8.77 billion ($10.18 billion). This was primarily based on net system sales increasing by 9.4% from the prior-year period to €6.28 billion ($7.29 billion). Its net income as a percentage of net sales increased from 30.4% to 31.4%, while net income per ordinary share rose 19.2% YOY to €7.15.
ASML continues to see strong demand due to AI-related infrastructure investments, as demand for AI chips outpaces supply. The company’s customers are planning to expand their capacity this year and beyond, leading ASML to expect increased short- and medium-term demand for its products.
For the current year, analysts expect ASML’s EPS (on a diluted basis) to grow 32.7% YOY to $37.10, followed by a 29.5% improvement to $48.06 in the next year.
What Do Analysts Think About ASML Holding’s Stock?
In April, analysts at RBC Capital maintained an “Outperform” rating on ASML’s stock and raised the price target from €1,625 to €1,700. The analyst firm expects revenue growth to remain strong through 2027 and 2028, supported by GenAI demand, tight memory supply, and increasing competition in foundry services.
In the prior month, Bernstein SocGen Group analysts raised the price target on ASML from $1,911 to $1,971, while keeping an “Outperform” rating. This is based on the current situation in the DRAM market. The firm expects DRAM capacity expansion to accelerate, rising from 145,000 additional wafers per month in 2025 to 245,000 in 2026, then to 330,000 in 2027 and 435,000 in 2028.
TD Cowen analysts reiterated a “Buy” rating, with a €1,500 price target. Analysts at the firm also named it the top European idea for this year, citing the company’s leadership position in lithography technology.
Wall Street analysts have a robustly favorable view of ASML’s stock, awarding it with a “Strong Buy” rating overall. Of the 28 analysts rating the stock, a majority of 22 analysts have rated it a “Strong Buy,” two analysts rated it “Moderate Buy,” while four analysts gave a “Hold” rating. The consensus price target of $1,694.78 represents a 3% upside from current levels, while the Street-high price target of $2,019 indicates a 22.7% upside.
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www.barchart.com On the date of publication, Anushka Dutta did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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