ASML Shares Receive Major Price Target Boost Ahead of Earnings

ASML USN070592100

A wave of renewed confidence is washing over the Dutch semiconductor equipment giant, ASML, just days before its keenly anticipated quarterly report. In a market preoccupied with looming trade tensions, a significant move by a major investment bank has captured investor attention, raising questions about whether current profit projections for the coming years are far too conservative.

The catalyst for the positive shift was a research note from UBS issued Wednesday morning. Analyst Francois-Xavier Bouvignies not only reaffirmed his Buy rating on the stock but dramatically increased the price target from €1,030 to €1,400. This bullish adjustment suggests considerable potential for appreciation from the current trading level, which recently stabilized around €1,137 on the Stuttgart exchange.

This optimistic stance stems from a fundamental disagreement with the prevailing market consensus. UBS’s financial models project earnings per share for 2026 and 2027 that are approximately 25% higher than the average estimates from other analysts.

The bank bases this forecast on the capital expenditure plans of ASML's key clients. Notably, the Taiwanese foundry leader TSMC is planning increased investments, which is expected to directly benefit orders for ASML’s advanced EUV lithography systems. Sustained demand from China is also cited as a continuing important driver. UBS is not alone in its positive outlook; RBC Capital recently set a target of $1,550, while Bernstein Research upgraded the stock to "Outperform."

Geopolitical Headwinds Temper Sentiment

Despite these robust fundamental prospects, fueled largely by the artificial intelligence boom, political risks are applying the brakes to unbridled market euphoria. Reports of potential US tariffs—reportedly set at 10% on imports from EU countries starting February 1, 2026—are creating uncertainty.

The semiconductor sector finds itself in a complex position. On one hand, the rapid expansion of AI infrastructure is pushing technological demand to record levels. On the other, investors are wary of the impact of shifting trade policies. With roughly 16% of ASML’s revenue derived from the US market and ongoing export restrictions to China remaining a persistent concern, every political development is being scrutinized.

All Eyes on January 28th

Market focus now shifts to next Wednesday, January 28, when ASML is scheduled to release its fourth-quarter results before the market opens. On average, analysts are anticipating revenue of $11.09 billion and earnings per share of $8.84.

However, the forward-looking order intake figure is considered far more critical than the historical results. Market observers will be closely watching to see if new bookings land in the range of €8 to €9 billion. A result within this band would support the thesis that the build-out of AI capacity is accelerating. Such a signal could provide the necessary catalyst to propel the equity out of its consolidation phase near 52-week highs, despite the ongoing geopolitical crosscurrents.