ASML Shares Surge to Record High on Memory Chip Demand

ASML USN070592100

The Dutch semiconductor equipment manufacturer ASML saw its equity reach an unprecedented peak last Friday, with enthusiasm among investors continuing to build. The company's stock price advanced by more than 6.6 percent to settle at $1,273.88, establishing a new historical benchmark. This rally is being fueled not solely by the ongoing demand for chips powering artificial intelligence but also by a previously underappreciated sector: DRAM memory.

In a significant move, analysts at the investment bank Bernstein designated ASML as their "Top Pick" among European semiconductor equities for 2026 as the weekend approached. This recommendation followed an upgrade of the stock from "Market Perform" to "Outperform," accompanied by a raised price target of €1,300, equivalent to approximately $1,528.

The foundation for this bullish outlook is an anticipated DRAM super-cycle. While investor focus has been heavily centered on logic chips, attention is now shifting toward the need for High Bandwidth Memory (HBM), a critical component for AI servers. Market experts at Bernstein contend that this specific demand is creating a substantial bottleneck in production equipment, benefiting key suppliers.

The Rising Criticality of Advanced DRAM

A shift toward more advanced DRAM generations, such as the 1c node, is altering the industry's dynamics. According to Bernstein's research, the so-called lithography intensity—the proportion of lithography steps in the chip manufacturing process—is climbing to as much as 28 percent. This marks a notable increase from the previous range of 20 to 24 percent.

In practical terms, this development means memory producers like Samsung and SK Hynix will need to purchase a significantly greater number of Extreme Ultraviolet (EUV) lithography systems from ASML to expand their manufacturing capacity. Consequently, the visibility of ASML's order book for 2026 and 2027 is being substantially enhanced.

Upcoming Earnings and the TSMC Catalyst

ASML is scheduled to release its fourth-quarter and full-year 2025 financial results on January 28. Market expectations are elevated, with current sentiment already pricing in a strong outperformance relative to consensus estimates. Prior to this event, the company's largest client, Taiwan Semiconductor Manufacturing Company (TSMC), will report its quarterly figures in mid-January.

The investment plans outlined by the Taiwanese chipmaking giant will be scrutinized for clues about future demand trends. Should TSMC confirm increased capital expenditures for its fabrication plants in Arizona and Taiwan, it would provide further support for the optimistic thesis surrounding ASML's growth trajectory.