ASML hits record high with AI enhancements, analysts see room to do more

Dutch semiconductor manufacturing equipment company ASML Following Taiwanese chip makers, it continues to rise until it reaches an all-time high. TSMC’s A positive financial report was released on Thursday.

ASML, Europe’s most valuable company and the world’s only supplier of the complex photolithography machines needed to make cutting-edge artificial intelligence chips, has seen its stock price rise about 7% since TSMC’s earnings announcement.

The company became the third European company to be valued at more than $5 trillion on Thursday, giving it a market capitalization of around 450 billion euros ($522 billion). ASML stock is up 25% year to date in 2026.

Morgan Stanley said Thursday that in a bullish case, the Dutch company’s stock could rise 70% in the coming years as spending by semiconductor makers continues to rise to meet AI demand. In this scenario, if the tech company’s valuation continues to soar and profits beat expectations, the stock could rise up to 2,000 euros, while the target price would be 1,400 euros, the bank added.

“Increased foundry and memory capital spending in 2027, as well as stronger-than-expected demand in China, provide our confidence that earnings will increase in 2027,” Morgan Stanley’s note said. “We expect orders for the next two to three quarters to support this strength.”

Bank of America said in an analyst note on Friday that TSMC’s capital spending outlook is “significantly” higher than prior expectations, supporting near-term upside for ASML “as extreme ultraviolet (EUV) and advanced deposition tools become critical to improving efficiency.”

Companies that are part of the global AI race are performing well as demand for the technology soars.

At the beginning of 2026, stocks of companies that provide memory chips, a key component of advanced semiconductors designed by Nvidia and AMD, rose. According to Counterpoint Research, memory prices are expected to rise another 40-50% in the first quarter of 2026.

“ASML stock has declined as semiconductor manufacturers are likely to make significant capital investments starting in the second half of 2026,” JPMorgan said in a note on Wednesday. “Samsung, the only major DRAM with cleanroom production capacity, is likely to increase its orders the most this quarter, and TSMC’s orders are also likely to be strong.”

DRAM refers to Dynamic Random Access Memory, a type of memory chip needed to store data needed for AI processing.

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

TSMC, ASML’s largest customer, received a further boost Thursday after the U.S. capped tariffs on Taiwan at 15% and announced that the country’s chip and technology companies would invest at least $250 billion in production capacity in the United States.

ASML is scheduled to announce its fourth quarter financial results on January 28th.