Key Takeaways
- Shares of ASML’s U.S.-listed stock have declined 7% over the last month amid broader rotation out of AI-linked semiconductor names.
- Krish Sankar from TD Cowen maintains a Buy rating with a €1,500 price target (approximately $1,735).
- The company’s valuation premium versus competitors has contracted from 120% to roughly 20% since the end of 2022.
- Upcoming logic and DRAM chip architectures are projected to increase dependence on ASML’s EUV lithography systems.
- Jensen Huang of Nvidia recently projected $1 trillion in AI chip orders extending through 2027, strengthening ASML’s demand outlook.
ASML has retreated from its recent peak levels, creating what at least one Wall Street analyst views as a compelling entry point. Krish Sankar of TD Cowen described the current valuation as “very attractive,” highlighting a compressed multiple alongside robust long-term prospects driven by AI semiconductor demand.
Shares of ASML trading in the United States have fallen 7% during the past month. The decline occurred as market participants shifted away from semiconductor equities linked to artificial intelligence growth, despite the company posting record bookings for its lithography equipment.
The Dutch firm occupies a critical position within the semiconductor manufacturing ecosystem. It maintains an effective monopoly on extreme ultraviolet (EUV) lithography technology, the specialized equipment required to produce cutting-edge microchips. No competitor currently offers comparable systems.
Since the conclusion of 2022, ASML’s valuation multiple relative to semiconductor capital equipment rivals such as Applied Materials, Lam Research, and KLA Corp has narrowed from a 120% premium to approximately 20%. Sankar attributes this compression to current chip production techniques that utilize fewer EUV layers from ASML’s tools.
However, Sankar contends this dynamic is poised to shift. Future generations of logic semiconductors and memory chips—particularly DRAM—will require additional EUV processing layers. He characterizes the memory chip opportunity as particularly “underappreciated” among investors.
High-NA EUV Systems Represent Next Wave of Growth
ASML’s latest generation machines, known as High-NA EUV systems, remain in the early phases of commercial deployment. The company reported revenue from only two High-NA units during the fourth quarter of 2025, contrasted with 94 conventional lithography tools delivered in that same timeframe.
TSMC has maintained a measured stance regarding public adoption of High-NA EUV technology. The Taiwan-based foundry has indicated it can maximize utilization of current-generation equipment. Nonetheless, Sankar anticipates that enhanced reliability metrics of the newer systems will ultimately drive customer adoption.
TD Cowen’s forecast models 60 lithography system shipments in 2026, expanding to 68 units in 2027 as High-NA deliveries double and older platforms transition to refreshed versions.
Sankar maintains his Buy rating on ASML’s Amsterdam-listed shares with a €1,500 price objective, derived from 48 times his 2027 earnings per share projection. ASML’s Amsterdam shares traded at €1,165 on Thursday. The U.S.-listed American Depositary Receipts declined 1.4% to $1,347.40 during premarket hours.
Artificial Intelligence Investments Support Multi-Year Demand Trajectory
The fundamental demand environment for ASML remains robust. Nvidia CEO Jensen Huang, speaking at the GTC 2026 conference on March 16, elevated his forecast for AI chip orders to at least $1 trillion extending through 2027. Separately, Broadcom CEO Hock Tan has projected $100 billion in AI semiconductor revenue for fiscal year 2027 alone.
Hyperscale technology companies including Amazon, Microsoft, Google, and Meta are anticipated to deploy nearly $600 billion in aggregate capital expenditures throughout 2026, with substantial allocations directed toward AI infrastructure buildout.
ASML also derives stability from recurring revenue streams. Maintenance and service contracts for its installed equipment base represented approximately one-quarter of total 2025 revenue.
ASML currently commands a forward price-to-earnings ratio of 39.8, elevated compared to its 10-year median of 35.8. The company’s market capitalization stands at roughly $527 billion.
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