Key Takeaways
- ASML (ASML) shares listed in the U.S. have declined 7% over the last 30 days amid broader semiconductor sector rotation.
- TD Cowen’s Krish Sankar maintains a Buy rating with a €1,500 price target (approximately $1,735).
- The company’s valuation multiple versus semiconductor equipment competitors has contracted from 120% to roughly 20% since Q4 2022.
- Next-generation logic processors and DRAM memory chips will demand increased EUV lithography capacity.
- Jensen Huang of Nvidia now projects $1 trillion in cumulative AI chip orders extending through 2027, strengthening ASML’s demand outlook.
ASML Holding has retreated from its recent peak levels, creating what at least one Wall Street analyst characterizes as an attractive entry point for investors. TD Cowen’s Krish Sankar described the current market positioning as “very attractive,” highlighting a more reasonable valuation alongside robust secular growth driven by artificial intelligence chip production.
Shares of ASML trading on U.S. exchanges have fallen 7% across the past 30 days. This decline occurred as market participants shifted capital away from semiconductor equities linked to the AI investment wave, despite ASML posting record-breaking order intake for its specialized lithography equipment.
The Dutch technology company occupies a singular position within the semiconductor manufacturing ecosystem. It maintains an effective monopoly on extreme ultraviolet (EUV) lithography equipment, the sophisticated machines essential for producing cutting-edge semiconductor nodes. No competing manufacturer produces comparable technology.
Between late 2022 and the present, ASML’s valuation premium compared to semiconductor capital equipment peers such as Applied Materials, Lam Research, and KLA Corp has compressed dramatically from 120% to approximately 20%. Sankar attributes this valuation compression to current chip manufacturing processes that utilize fewer EUV lithography steps.
However, Sankar contends this dynamic is poised to shift substantially. Future generations of both logic semiconductors and memory devices—particularly DRAM technology—will require additional EUV processing layers. He emphasizes that the memory chip opportunity remains significantly “underappreciated” by market participants.
High-NA EUV Technology Represents Key Growth Catalyst
ASML’s most advanced products, the High-NA EUV lithography platforms, remain in the initial phases of commercial deployment. The company reported revenue recognition from only two High-NA units during Q4 2025, contrasted with 94 conventional lithography systems delivered in that same quarter.
TSMC has exhibited hesitation regarding public commitments to High-NA EUV adoption. The foundry leader has indicated it can maximize utilization of current-generation equipment. Nevertheless, Sankar anticipates that enhanced reliability metrics of the advanced systems will ultimately drive customer adoption.
TD Cowen’s financial model projects 60 lithography system shipments during 2026, expanding to 68 units in 2027 as High-NA installations double and legacy platforms transition to refreshed configurations.
Sankar maintains a Buy recommendation on ASML’s Amsterdam-listed shares with a €1,500 valuation target, derived from 48 times his 2027 earnings per share projection. ASML’s primary listing traded at €1,165 on Thursday. The American Depositary Receipts declined 1.4% to $1,347.40 during premarket hours.
Artificial Intelligence Capital Expenditures Drive Equipment Demand
The fundamental demand environment for ASML remains exceptionally strong. Nvidia CEO Jensen Huang, presenting at the GTC 2026 conference on March 16, increased his AI chip order projection to a minimum of $1 trillion extending through 2027. Separately, Broadcom CEO Hock Tan has projected $100 billion in AI semiconductor revenue for fiscal year 2027 independently.
Amazon, Microsoft, Google, and Meta are collectively anticipated to deploy approximately $600 billion in capital investments during 2026, with substantial allocations directed toward AI computing infrastructure.
ASML additionally generates predictable recurring revenue streams. Maintenance and service contracts for its global installed equipment base represented roughly one-quarter of total 2025 revenue.
ASML currently commands a forward price-to-earnings multiple of 39.8, elevated compared to its 10-year median of 35.8. The company’s market capitalization stands at approximately $527 billion.
