ASML Shares Surge on Upgraded Outlook and Memory Cycle Forecast

ASML USN070592100

Shares of semiconductor equipment leader ASML Holding NV opened the week with significant strength, propelled by a major analyst upgrade. Bernstein SocGen Group not only raised its rating on the stock but also named it a top pick within the European chip sector for 2026. The move, accompanied by a substantially increased price target and optimistic assumptions about an upcoming memory cycle, has injected fresh momentum. The key question for investors is whether this analyst endorsement can solidify the stock's upward trajectory.

The catalyst for Monday's move was a new research report from Bernstein analyst David Dai. He upgraded ASML from "Market Perform" to "Outperform." More notably, Bernstein's price target was lifted dramatically from €800 to €1,300. Based on recent trading levels, this new target implies a potential upside of approximately 32%.

At the core of this bullish reassessment is the anticipation of a forthcoming "DRAM super-cycle." Bernstein expects this multi-year trend to underpin ASML's growth. The firm's analysis indicates that the world's three largest DRAM manufacturers plan to add as much as 250,000 wafers per month of new "greenfield" capacity by 2026. Such a significant expansion in manufacturing capabilities would directly fuel demand for advanced lithography systems.

The research highlights several critical technical drivers:

• Faster Node Transition: DRAM providers are accelerating their migration to the 1c node.
• Increased Lithography Intensity: The 1c node requires a lithography intensity near 28%, a notable increase from the 20–24% range needed for prior nodes.
• Robust Logic Demand: Beyond memory, demand in the logic segment remains strong. Bernstein notes that TSMC is expected to expand its 3nm capacity to between 180,000 and 200,000 wafers per month to meet demand from AI applications.

Bernstein's forecast projects an average earnings-per-share compound annual growth rate (EPS-CAGR) of 18% for ASML from 2025 through 2027. This outlook surpasses the current market consensus, which sits around 15%.

Building on a Positive Shift in Sentiment

Bernstein's upgrade follows another notably bullish call from the previous week. On January 2, Aletheia Capital executed a rare double-upgrade, moving its rating from "Sell" directly to "Buy." The firm set a price target of $1,500, also citing powerful tailwinds from AI and memory markets.

Collectively, these significant analyst actions signal a shift in market perception. The focus is moving away from previously dominant concerns over export restrictions and toward the resilient demand for ASML's extreme ultraviolet (EUV) lithography technology.

From a valuation perspective, Bernstein points out that ASML has historically traded at a premium of about 1.6x compared to other semiconductor equipment makers. Currently, that premium stands near 1x, placing it at the lower end of the historical range. This suggests room for multiple expansion despite recent share price gains.

Furthermore, a delayed industry migration to so-called 4F² DRAM structures—once viewed as a risk to EUV demand—is now being interpreted more favorably. Memory suppliers are instead focusing on optimizing manufacturability with existing EUV tools, which should support sustained demand for current system generations.

The Critical Horizon: 2026-2027

The coming quarters will be crucial for confirming whether the planned capacity expansions by major customers materialize as projected. Bernstein identifies the 2026-2027 period as particularly important for the broader adoption of EUV technology.

On a technical analysis basis, the share price has entered new territory by breaking through the €1,000 level. A sustained hold above this psychological threshold would be viewed by market technicians as confirmation of a positive trend structure.

Investor attention will now turn to upcoming financial reports and commentary from key ASML customers like Samsung, SK Hynix, and TSMC. Their guidance on capital expenditure budgets for the remainder of the year will be pivotal in validating the growth scenario currently being priced into ASML's stock.