ASML Shares Surge on Upgraded Analyst Outlook and AI Demand

ASML USN070592100

A pair of significant analyst upgrades, highlighting underestimated growth in memory chips and sustained AI-driven demand, have propelled shares of Dutch lithography giant ASML to record highs. The stock emerged as one of the top performers in the Nasdaq 100 following the revised assessments.

The rally was ignited after Bernstein Research analyst David Dai raised his rating on ASML from Market Perform to Outperform. His price target saw a substantial increase from €800 to €1,300, implying a potential upside of approximately 32% from recent trading levels.

This move followed an even more dramatic upgrade from Aletheia Capital, which shifted its stance directly from Sell to Buy. The firm set a new street-high price target of €1,500. In response to this bullish sentiment, ASML's stock price advanced by 8.8%.

Memory Chip Segment: A Key Growth Driver Underestimated

Bernstein’s optimistic thesis centers on what it sees as a largely overlooked opportunity within the DRAM memory segment. While many investors have focused on growth in logic chips, the analysts argue that the contribution from memory investments is being undervalued.

Several structural factors are driving this demand:
* DRAM Capacity Expansion: Major memory manufacturers are planning to add roughly 250,000 new wafers per month of capacity by 2026.
* Increased Lithography Intensity: The transition to 1c-DRAM technology is expected to require a lithography intensity of 28%, up from the previous range of 20–24%.
* AI Server Demand: Companies like Samsung Electronics, SK Hynix, and Micron are boosting capital expenditure budgets to meet soaring demand for AI servers, addressing previous cleanroom space constraints through new construction and capacity conversion.
* Technology Shift Concerns Ease: Fears that a migration to a 4F² memory structure could reduce demand for EUV systems have temporarily subsided. In the current strong demand environment, manufacturers are prioritizing production capability over cost optimization, supporting higher EUV usage into the second half of the decade.

Valuation and Financial Outlook

Despite the strong price performance, Bernstein analysts suggest ASML’s valuation remains attractive relative to its history. The stock currently trades at a premium of approximately 1x its peer group, below its historical average premium of around 1.6x.

The firm has raised its estimated earnings growth for the 2025-2027 period to an average annual rate of 18%, notably above the consensus estimate of 15%. This outlook is further supported by recent management guidance indicating that 2026 revenue is not expected to fall below 2025 levels.

Advanced Logic and Sustained AI Momentum

Beyond memory, the advanced logic segment continues to serve as a core growth engine. Leading foundries are expanding their 3-nanometer capacity to cater to AI demand. Bernstein notes this technology node carries the highest lithography intensity and is set to form the foundation for the majority of GPUs and AI accelerators over the next two years.

The analysts label 2026 and 2027 as "big years for EUV and for ASML," positioning the company as the primary beneficiary of planned semiconductor industry investments due to its effective monopoly in EUV lithography systems.

Acknowledging Persistent Risks

While the outlook is positive, geopolitical risks and technological complexity present ongoing challenges. Export controls, tariffs, and political intervention could hinder access to key end markets or delay customer investment plans. Furthermore, the complex rollout of next-generation High-NA EUV systems continues to influence the timing and scale of customer orders.

Over a twelve-month horizon, ASML shares have gained approximately 59%. The market’s next key milestone will be the quarterly results scheduled for January 28, 2026, which should provide evidence on whether the growth dynamics anticipated by Bernstein are reflected in official company forecasts.