Why ASML Stock Could Keep Running After Blowout Quarter

Table of Contents

TLDR

ASML reported record Q4 net bookings of EUR 13.2 billion, crushing analyst estimates of EUR 8-10 billion on strong AI demand
Bernstein raised price target from $1,642 to $1,911 while RBC Capital increased target from $1,550 to $1,625, both maintaining Outperform ratings
Strong AI-driven demand for DRAM and Advanced Logic chips is offsetting slower business in China
ASML holds monopoly on EUV lithography systems, the only technology capable of producing most advanced AI chips for TSMC, Samsung, and Intel
Company expects revenue to hit EUR 44-60 billion by 2030, representing 10% compound annual growth rate

ASML Holding just delivered numbers that made Wall Street sit up and take notice. The Dutch semiconductor equipment maker posted fourth-quarter net bookings of EUR 13.2 billion, blowing past estimates of EUR 8-10 billion by a wide margin.

ASML Stock Card
ASML Holding N.V., ASML

Two major firms responded quickly to the earnings beat. Bernstein analyst David Dai bumped his price target from $1,642 to $1,911 on January 29. RBC Capital followed suit the same day, raising its target from $1,550 to $1,625.

Both firms kept their Outperform ratings intact. The question now is whether the stock can live up to these loftier expectations.

The bookings surge tells a clear story about where the semiconductor industry is headed. AI chips need cutting-edge manufacturing, and ASML provides the only tools that can make it happen.

RBC Capital highlighted that AI-driven demand for DRAM and Advanced Logic is more than compensating for weakness in China. The firm projects double-digit revenue growth continuing through fiscal year 2027.

Three factors support this outlook: tight DRAM supply, adoption of more advanced nodes in AI processors, and renewed competition among foundries. Each one points to more orders for ASML’s equipment.

The EUV Monopoly

ASML’s competitive position is unique in the tech world. The company is the sole producer of extreme ultraviolet lithography systems.

These EUV systems are essential for manufacturing the smallest and most power-efficient chips. Without them, companies like Nvidia couldn’t produce their latest AI processors.

Every major foundry relies on ASML’s technology. TSMC, Samsung, and Intel all use EUV systems in their most advanced manufacturing nodes.

This monopoly position gives ASML pricing power and visibility into future demand. When foundries invest in new capacity, ASML benefits directly.

The stock has rallied about 90% over the past 12 months. It currently trades around $1,405, just below its 52-week high of $1,493.

That run-up values the company at 41 times this year’s earnings. The valuation isn’t cheap by traditional metrics.

However, analysts expect earnings per share to grow at a 24% compound rate from 2025 to 2027. That growth trajectory helps justify the premium multiple.

ASML projects revenue between EUR 44 billion and EUR 60 billion by 2030. The midpoint represents a 10% compound annual growth rate from 2025 levels.

The company’s market cap stands at $545 billion. Trading volume was lighter than usual at 56,000 shares compared to the average of 1.7 million.

ASML pays a dividend yielding 0.55% at current prices. Gross margin came in at 52.80% in the most recent period.

The stock’s 52-week range spans from $578.51 to $1,493.47, showing the volatility that comes with semiconductor equipment stocks. Day’s range on the latest trading session was $1,400.95 to $1,436.60.

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