ASML Shares Approach Record Territory Ahead of Earnings

ASML USN070592100

The stock of the semiconductor equipment giant continues its ascent, reaching new peaks as investors anticipate next week's quarterly report. Bolstered by a significant capital expenditure announcement from its largest customer and a wave of bullish analyst notes, the company recently surpassed a market valuation of $500 billion. While Wall Street sentiment is decidedly upbeat, the focus is now shifting to the concrete financial figures due for release.

The most significant catalyst for the recent surge originated from Taiwan. Taiwan Semiconductor Manufacturing Co. (TSMC), a primary client, jolted the market by substantially raising its investment blueprint. For 2026, the chipmaker now plans capital expenditures of up to $56 billion.

This figure handily exceeded prior market expectations and points to sustained, robust demand for the extreme ultraviolet (EUV) lithography systems where ASML holds a monopoly. In direct response to this news, ASML's share price hit a new 52-week high of $1,360.09 on January 21. Since the start of the year, the equity has already posted a gain of nearly 17 percent.

Analysts Revise Targets Upward

A series of optimistic research reports this week has further fueled buying interest. On January 14, RBC Capital initiated coverage on the shares with an "Outperform" rating and a $1,550 price target. Analyst Srini Pajjuri cited long-term and cyclical growth drivers in both the memory and logic chip segments.

UBS also turned more optimistic at the week's start, lifting its price target from €1,030 to €1,400. The bank argued that momentum in logic, memory, and demand from China is "too strong" to overlook. Its revised forecasts now project profits for 2026 and 2027 that are approximately 25 percent above the current market consensus. In a bullish scenario analysis, Morgan Stanley even outlined a potential upside reaching €2,000.

Memory Market Recovery Adds Momentum

Beyond strength in logic chips, ASML is gaining tailwinds from a rebound in the memory sector. Zacks Equity Research includes the stock among top technology picks likely to exceed fourth-quarter expectations. Analysts project earnings per share of $8.85, which would represent year-over-year growth of 21.2 percent.

Market observers currently identify several key price drivers:
* An extremely tight supply environment for DRAM memory.
* Anticipated price increases of 40 to 50 percent for memory chips in Q1 2026.
* Rising demand for advanced manufacturing processes required for AI accelerators.
* Samsung's potential ramp-up of HBM4 production.

All Eyes on January 28

ASML is scheduled to unveil its results for the fourth quarter and full year 2025 on Tuesday, January 28. Investor attention will be firmly fixed on order intake and forward guidance. UBS anticipates the company will provide a revenue growth outlook of 10 to 20 percent for 2026. Furthermore, fourth-quarter orders may have reached historic highs of €8 to €9 billion, driven by the need for both Samsung and TSMC to secure manufacturing capacity.