ASML Rally Gains Steam as Top Firms Lift Targets

ASML has caught a fresh wave of optimism after two well-known research houses boosted their outlooks for the Dutch semiconductor equipment maker. The moves helped send the stock to a new high for the year, with one firm even doubling its price target from $750 to $1,500.

A dramatic turn in stance

On the first trading day of 2026, Aletheia Capital flipped its stance from Sell to Buy and assigned a price target of $1,500, double its prior level. The justification centers on a pronounced ramp in chipmaking expenditure, notably at Taiwan Semiconductor Manufacturing Co. (TSMC), which is planning to lift capex in 2026 to around $50 billion, up from roughly $40–$42 billion in the prior year.

The market made its reaction swift: on January 2, ASML climbed about 9% intraday and later posted a fresh 52-week high near $1,246.38.

Bernstein enhances the thesis

Shortly after, Bernstein SocGen joined the chorus, upgrading ASML’s rating from Market Perform to Outperform and lifting the price target to €1,300. Analyst David Dai highlights three key drivers:

• DRAM cycle: The three largest DRAM producers are pushing new capacity, potentially up to 250,000 wafers per month in 2026.
• Lithography intensity with the 1c node: The shift raises lithography intensity to about 28%, versus the 20–24% range of earlier generations.
• Advanced-Logic demand: The 3nm production run requires substantial lithography equipment and underpins many AI accelerators.

Cybersecurity rumors debunked

On January 7, ASML was compelled to address cybersecurity chatter in BreachForums alleging a data breach. After internal checks, the company stated the allegations were unfounded and there was no data leak. Nevertheless, the stock slipped around 1% that day, ending a six-session rally.

Fundamentals back the uptrend

ASML’s Q3 2025 results provided solid support for the positive momentum. Revenue reached €7.5 billion, edging the prior-year figure of €7.47 billion, while the gross margin improved to 51.6%. Notably, net order intake more than doubled to €5.4 billion, driven by stronger demand for EUV systems.

For Q4 2025, management guided revenue between €9.2 billion and €9.8 billion, representing a sequential rise of roughly 26%.

What the analysts are saying

From a pool of 26 covering analysts, 18 rate the stock as a Strong Buy, one as a Moderate Buy, and seven as a Hold. The average price target sits at $1,083, already surpassed by the current momentum. Morgan Stanley remains Overweight, pointing to the impending DRAM cycle and rising foundry spending as tailwinds.

Profit outlook and growth trajectory

For fiscal year 2025, consensus estimates call for earnings per share of $29.06, up about 40% year over year. In 2026, a further expansion of around 4% is anticipated, bringing EPS to $30.19.

China exposure and near-term uncertainties

ASML notes that its China business is normalizing after a couple of exceptionally strong years. The company expects revenues from the region to decline. The Deep Ultraviolet segment is also expected to be softer in 2026, given China’s role as a key market for immersion and mainstream lithography systems.

Valuation remains elevated, with a forward P/E around 35.4. The Q4 earnings release is penciled in for January 28, at which point investors will assess whether the upbeat outlook can be sustained.