Wall Street is becoming increasingly bullish with its ASML Holding (NASDAQ: ASML) stock price targets, as artificial intelligence (AI) drives an unprecedented expansion in advanced semiconductor manufacturing.
On August 11, Bank of America reiterated its ‘Buy’ rating and $2,831 price target on the Dutch company, arguing the stock has a strong competitive advantage in the industry. A day later, on August 12, Bernstein also maintained a ‘Buy’ rating, with a price target of $2,859.
The bullish outlook comes even after ASML shares have already delivered a huge rally, with the stock currently trading at $1,810, up roughly 140% over the past year with a market capitalization of approximately $700 billion.
Analysts double down on bullish ASML stock price targets
In the research note, Bank of America argued that the more critical lithography becomes to the semiconductor industry, the more valuable ASML’s position becomes.
Notably, the bank reasoned that although a growing group of well-funded start-ups is attempting to develop alternative lithography technologies, investors may be interpreting the developments incorrectly.
That is, rather than seeing new competitors as proof that ASML’s moat is disappearing, the researchers view their emergence as confirmation that lithography has become one of the most important bottlenecks in scaling leading-edge chips for AI.
After all, ASML’s EUV systems are used to manufacture some of the world’s most advanced processors and memory chips. Chipmakers such as TSMC (NYSE: TSM) and Intel (NASDAQ: INTC), for example, are now investing tens of billions of dollars in new fabrication capacity, making the productivity and reliability of their equipment critical.
ASML’s recent earnings performance provides another reason analysts remain optimistic. Indeed, the company has delivered strong double-digit EPS results in the past four quarters. Consensus EPS estimates have also been revised sharply higher, rising 25% over the past 30 days and approximately 59.65% over the past year.
ASML is a huge AI opportunity, Bernstein says
Bernstein is similarly optimistic about ASML’s long-term growth prospects. Notably, the firm expects the company to ship 91 EUV machines in 2027, compared with its previous estimate of 86. For 2028, analysts now expect 113 EUV systems, way above its earlier forecast of 87.
Alongside its high ASML stock price target, Bernstein expects ASML’s EUV business to grow at an average annual rate of approximately 30%, reaching €42.7 billion (~$49.25 billion) in revenue by 2030. That forecast is more than 30% above the broader Wall Street expectation.
In addition, the asset-management firm has increased the earnings multiple it is willing to pay for ASML from 35x to 40x. This, the note argued, is because the stock looks relatively inexpensive compared with other semiconductor equipment companies when its growth prospects are considered.
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