A Dramatic Reversal: Influential Analyst Doubles Price Target for ASML Shares

ASML USN070592100

A radical shift in stance from a prominent research firm has ignited significant trading activity for semiconductor equipment giant ASML. In a move that diverges sharply from typical incremental adjustments, Aletheia Capital has not only upgraded its rating on the stock from "Sell" to "Buy" but has also set a new price objective that is double its previous target. The market's response in European trading and US pre-market activity was immediate and pronounced.

The catalyst for this surge is a fresh analysis from Aletheia Capital's Warren Lau. The strategist now projects a price target of $1,500 per share for ASML, a figure that currently stands at the top of Wall Street's estimates and marks a substantial increase from his prior target of $750. This optimistic reassessment triggered a swift upward move across key markets.

• In US pre-market trading, ASML shares advanced by approximately 4.8%.
• On European exchanges, the stock climbed over 5% to reach €968.20.
• The company's performance contributed to the Euro Stoxx 50 index achieving a new record high.

The Rationale Behind the Major Upgrade

Aletheia Capital justifies this decisive upgrade by pointing to raised earnings estimates for ASML's 2026 and 2027 fiscal years. According to their research, several operational factors are driving this improved outlook.

• Exceeding EUV Demand Expectations: Demand for ASML's cutting-edge Extreme Ultraviolet (EUV) lithography systems is surpassing forecasts, with particular strength noted from DRAM memory chip manufacturers.
• Resilient Orders from China: Despite ASML's own expectation of a significant decline in China-related sales for 2026, current orders for its Deep Ultraviolet (DUV) systems from the region remain robust.
• TSMC's 2027 Potential: For the 2027 fiscal year, Aletheia anticipates a potential increase in demand from TSMC, a pivotal client for ASML.

This aggressive price target revision is directly linked to these concrete growth expectations for the next two to three years.

China's Enduring Role in the Outlook

The Chinese market continues to be a central factor in ASML's financial landscape. In 2024, China accounted for roughly 36% of the company's total revenue. While management anticipates a regional sales contraction for the current year, the Aletheia report underscores the present resilience of incoming orders.

This observation is notable given reports that China now mandates a 50% share of domestic equipment for new chip fabrication plants. Despite this political and regulatory headwind, the analyst views the ongoing order flow from China as a supportive element.

A Strong Run in a Supportive Sector

This upgrade follows an already powerful performance for ASML's stock, which gained more than 50% over the past year. The current valuation reflects the market's expectation that customer capacity expansions and investment programs will translate into sustained profit growth through at least 2027.

Consequently, the significantly more optimistic long-term perspective presented by Aletheia's analyst is being absorbed by a market already characterized by high demand for semiconductor manufacturing equipment.