ASML stock gains on upgrade to Top Pick at Bernstein

Investing.com -- ASML shares rose on Monday after Bernstein upgraded the Dutch chipmaking equipment supplier to Outperform and named it its top pick among European semiconductor stocks for 2026, citing a combination of accelerating memory investment, stronger logic demand and a more attractive valuation backdrop.

The broker raised its price target to €1,300 from €800, implying around 32% upside from current levels.

The stock was up 3.7% in Amsterdam by 09:02 GMT.

Bernstein analyst David Dai believes ASML stands to benefit disproportionately from an emerging DRAM upcycle, arguing that the market is underestimating the scale of capacity expansion planned by the three largest DRAM manufacturers.

Those producers are collectively adding as much as 250,000 wafers per month of greenfield capacity in 2026, he noted, while also accelerating the transition to the 1c node.

“This is great for ASML, as litho intensity for 1c is 28% based on our estimates, much higher than previous nodes of 20–24%,” Dai wrote.

The analyst also flagged a reduced near-term risk from DRAM technology changes.

Concerns around migration to a 4F² structure, which would be negative for extreme ultraviolet (EUV) tools, appear to be easing or at least delayed, Dai said, as suppliers prioritise manufacturability over cost in a strong demand environment. This supports higher EUV usage through the second half of the decade.

Beyond memory, Dai pointed to advanced logic as a second major growth driver. He cited plans by leading foundries to expand leading-edge capacity to meet AI demand, with particular emphasis on 3-nanometre (nm) production.

3nm carries the highest lithography intensity and is expected to underpin most GPUs and AI accelerators over the next two years, he highlighted.

Taken together, Dai said these trends position 2026 and 2027 as “big years for EUV and for ASML,” prompting him to lift its expected earnings growth to an 18% compound annual rate over 2025–27, compared with a 15% consensus view.

On valuation, the analyst argued that ASML is now trading at a trough premium versus semiconductor production equipment peers, with its multiple at roughly 1 times peers compared with a historical average of 1.6 times.

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