Key Highlights
- Bernstein’s Stacy Rasgon emphasized AI chip demand “shows no signs of slowing,” boosting ASML by 5.1%
- Though Rasgon didn’t explicitly mention ASML, investors linked his thesis to the semiconductor equipment maker
- Bank of America maintained its Buy rating with a €1,598 target following Asia investor meetings
- BofA positions ASML as a “prime beneficiary” of expanding EUV technology and increased memory sector investment
- BofA’s €52 billion revenue projection for 2028 appears conservative; a capital markets presentation is anticipated this year
ASML Holding surged more than 5% Monday following encouraging analyst commentary from two major Wall Street firms that rekindled investor enthusiasm for the semiconductor equipment giant.
The rally began with research from Bernstein’s Stacy Rasgon. While he avoided mentioning ASML explicitly, market participants quickly connected his observations to the equipment maker.
Rasgon’s analysis centered on the artificial intelligence chip sector, contending that demand “currently shows no signs of slowing” even as AI-related equities have faced pressure this year.
He singled out Broadcom (AVGO) as particularly promising, projecting the company could multiply its 2025 earnings fourfold to exceed $20 per share. Nvidia (NVDA) could see earnings expand from below $5 last year to $12 or higher by 2027. ASML shares were changing hands near $1,369 during trading hours, representing approximately 3.9% daily gains.
The Connection Between AI Chip Growth and ASML
The linkage works like this: escalating AI chip demand translates to higher revenues for semiconductor designers including Nvidia and Broadcom. This revenue growth cascades to manufacturing partners like TSMC, which must increase production capabilities. Capacity expansion requires purchasing additional equipment — specifically ASML’s advanced lithography systems.
Rasgon also highlighted persistent supply limitations stemming from inadequate chip manufacturing capacity. This dynamic creates ideal conditions for sustained demand in ASML’s specialized lithography equipment.
ASML’s current valuation stands at 46.5 times trailing earnings, which isn’t particularly inexpensive. However, Wall Street projects 19% compound annual earnings growth over the coming five years, and if Rasgon’s AI demand scenario materializes, such growth rates could validate current pricing levels.
Bank of America Projects Strength Through 2027 and Further
In a separate research report, Bank of America’s Didier Scemama shared findings from recent investor meetings throughout Asia.
His central conclusion: the memory semiconductor cycle is “likely to remain strong through at least 1H27E.” This outlook supports ASML’s backlog well beyond the near term.
BofA identified three major growth drivers. Initially, high-NA EUV technology adoption is anticipated in 2028, spearheaded by TSMC and SK Hynix. Equipment availability reached 80% by year-end 2025 and should hit 90% by the close of 2026. Scemama forecasts 15 high-NA system deliveries in 2028.
Secondly, low-NA EUV production capacity is projected to reach maximum utilization by Q4 2027, with 22 system deliveries scheduled for that year. BofA anticipates ASML may announce expanded EUV capacity during 2026.
Third, BofA expects ASML to convene a capital markets presentation later this year and believes the company could elevate its 2030 revenue guidance to a range between €53.7 billion and €65.4 billion.
BofA presently models €52 billion in 2028 revenues and characterizes this projection as “increasingly conservative” relative to broader market consensus.
Bank of America reaffirmed its Buy recommendation with an unchanged €1,598 price objective, designating ASML as its preferred selection within the semiconductor equipment sector.
