Bernstein simply made the boldest calls I’ve lined within the semiconductor area over time on ASML Holding inventory (ASML), and it didn’t do it quietly.
It upgraded the Dutch semiconductor gear large’s inventory to outperform whereas mountain climbing its value goal to $1,528, up from $935 (a mammoth 63% enhance).
From the inventory’s current stage round $1,242, Bernstein sees roughly 23% upside, or about $286 per share.
The rationale behind it’s clear, because the agency argues that the present chip spending cycle is a multi-year progress story, and the market hasn’t priced that in.
Bernstein claims that demand linked to AI isn’t solely boosting the gross sales of flashy logic chips and GPUs, but additionally laying the inspiration for large, multi-year capital spending by reminiscence makers and foundries alike.
It comes at a degree when AI shares like Nvidia are pausing, whereas the corporate is promoting the must-have instruments to construct extra GPUs and is posting stable good points.
For perspective, up to now six months alone, ASML inventory is up an incredible 56%, surging previous the S&P 500’s 11% acquire within the course of.
Bernstein’s sweeping improve alerts ASML’s AI-driven progress cycle could also be removed from totally priced in.
Photograph by Bloomberg on Getty Photographs
Reminiscence shares quietly left AI’s largest names behind
Of late, we’ve seen the AI bellwethers that primarily spearheaded the inventory market fall out of favor.
Working example: Nvidia inventory is up simply 1% up to now three months, having closed out final yr with a 25% acquire. Conversely, reminiscence chip shares akin to Micron and ASML have posted double-digit good points.
The explanation lies in a easy supply-demand mismatch that has flipped the narrative.
After a sustained downturn, the reminiscence market swung into deficit proper when AI demand exploded.
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For perspective, coaching superior AI fashions entails large quantities of DRAM (dynamic random-access reminiscence), high-bandwidth reminiscence, and flash storage, in line with TechTarget.
A single Nvidia DGX B200 system carries a jaw-dropping 1,440GB of HBM3e (throughout 8 GPUs) together with 2TB of system reminiscence (that’s excluding storage), Uvation studies.
Nonetheless, provide couldn’t sustain, forcing costs to leap, and margins quickly adopted.
As an example, its AI-powered segments, akin to Cloud Reminiscence, put up a large 66% gross margin (company-wide at 45%).
Moreover, Micron exceeded market expectations and revealed it had bought out of HBM chips via 2026.
Bernstein thinks ASML’s finest progress remains to be forward
Bernstein’s bullish tackle ASML is grounded in a set of forecasts suggesting the market is underestimating the energy of the present chip spending cycle.
The agency expects ASML’s income to leap by one other 6% in 2026, adopted by a 10% to 12% annual progress charge via 2030, as chipmakers flip it up a notch on their investments to satisfy AI-driven demand.
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That sturdy progress will translate into stronger earnings, with operational margins rising to 57.7% by the finish of the last decade, up considerably from 52.8% final yr.
Furthermore, Bernstein analysts consider that ASML’s fortunes are linked to reminiscence moderately than the rest.
The world’s prime DRAM makers proceed to spice up capital expenditures (capex) in 2026 and 2027 to maintain tempo with the breakneck demand for AI servers, whereas migrating to extra superior manufacturing methods akin to lithography, which is defined in a video posted by Physics Frontier.
The reminiscence giants powering the AI growth
- Samsung Electronics: The world’s largest reminiscence producer advantages from its immense scale, early EUV adoption in DRAM, and deep integration throughout a number of gadgets.
- SK hynix: The clear frontrunner in HBM for AI provides cutting-edge HBM to GPU makers, with a lot of its 2026 output bought out.
- Micron Know-how: The pure-play AI reminiscence participant has bought out of HBM via 2026 because it dominates the area.
- Western Digital: A NAND and storage large, Western Digital is profiting from exploding AI information necessities via SSDs and flash options.
Bernstein sees a double tailwind forming for ASML
Contemplating the large AI workload necessities, reminiscence firms are compelled to spend so much extra and in a different way than in earlier cycles.
For ASML, the core facet is complexity.
Bernstein argues that the upcoming “1c” DRAM node will allocate a exceptional 28% of producing steps to lithography, up from 20% to 24% in earlier generations.
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For perspective, lithography is basically the “printing” step for chipmakers, the place gentle is used to attract out microscopic circuit patterns onto chips.
Evidently, that half prices a ton, and ASML’s EUV instruments that carry out it value almost $150 million every.
Extra steps entail extra instruments, but ASML CEO Christophe Fouquet reiterated the corporate’s aggressive edge, Fintool studies.
The logic half provides one other main increase.
Bernstein cites “unprecedented AI demand,” compelling foundries akin to TSMC and Samsung to develop their capability. TSMC alone may probably add a head-turning 40 to 45 EUV scanners by 2027, Qualtrim posted on X (the previous Twitter).
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