ASML hits record high on AI boost and analysts see further room to run

Dutch semiconductor equipment company ASML After the Taiwanese chip manufacturer increased its earnings to record levels TSMCs Strong earnings report on Thursday.

ASML, Europe’s most valuable company and the world’s sole supplier of the complex photolithography machines needed to produce the most advanced AI chips, has seen its shares rise around 7% since TSMC’s earnings release.

The company on Thursday became the third European company to see its valuation rise above half a trillion dollars, taking its market value to nearly 450 billion euros ($522 billion). Shares of ASML are up 25% so far in 2026.

Morgan Stanley said Thursday that in a bullish case, shares of the Dutch company could rise as much as 70% as chip maker spending continues to rise to meet demand for AI. In this scenario, the bank predicts the shares will rise up to 2,000 euros if technology valuations continue to rise and profits exceed expectations, adding that the price target is 1,400 euros.

“Higher foundry and memory capex in 2027, along with better-than-feared demand from China, reinforce our belief in higher fiscal year earnings,” Morgan Stanley said in a note. “We expect order intake to confirm this strength over the next 2-3 quarters.”

TSMC’s capital spending guidance “significantly” exceeded previous expectations, supporting near-term bullishness for ASML as EUV, Bank of America said in an analyst note on Friday. [extreme ultraviolet] and advanced deposition tools are becoming critical to efficiency gains.”

Companies involved in the global AI race have seen strong performances as demand for the technology increases.

The start of 2026 has seen a stock rally among companies that provide memory chips, key components of advanced semiconductors designed by Nvidia and AMD. According to Counterpoint Research, memory prices are expected to increase by another 40-50% in the first quarter of 2026.

“ASML shares are down on the potential for strong capex from semi-manufacturers through late ’26,” JPMorgan said in a note Wednesday. “Samsung, the only DRAM specialist with existing cleanroom capacity, is likely to increase orders most significantly this quarter, while TSMC orders are also likely to be strong.”

Referring to Dynamic Random Access Memory, DRAM is a type of memory chip required to store data required for AI processing.

Earlier this month, major Nvidia partner Foxconn, the world’s largest contract electronics manufacturer and maker of servers that keep chips in data centers, reported a 22% increase in revenue in the final quarter of 2025.

TSMC, ASML’s largest customer, received another boost on Thursday as the United States announced it would limit tariffs on Taiwan to 15% and the country’s chip and technology companies are investing at least $250 billion in U.S. manufacturing capacity.

ASML will report fourth-quarter earnings on January 28.