UBS names top European chip stocks to watch ahead of Q3 2026 earnings season
Investing.com -- UBS analyst Francois-Xavier Bouvignies maintains a constructive outlook on European semiconductor stocks heading into third-quarter 2026 earnings, favoring companies with clear market share gains and meaningful exposure to artificial intelligence demand. In a September 29 research note, the analyst highlighted semiconductor capital equipment makers as top picks, citing AI-driven capacity expansion supporting a robust multi-year growth outlook.
1. ASML Holding NV (AS: ASML) (Buy, €2,350 price target)
ASML remains UBS's top pick in the European chip sector. The analyst expects the company to guide fiscal 2027 revenue growth above 30% year-over-year when it reports third-quarter results on October 14. UBS anticipates management will update capacity targets for low NA and immersion systems to exceed 30% growth in both 2027 and 2028. Pricing represents the largest earnings lever, with UBS analysis suggesting 15% to 20% EPS upside to consensus by 2028. The firm's third-quarter revenue estimate of €12.1 billion sits 3% above consensus.
2. ASM International NV (AS: ASMI) (Buy, €1,325 price target)
ASM International ranks as UBS's second preferred name, with the analyst forecasting 36% revenue growth in fiscal 2027 versus consensus at 29%, followed by 33% growth in 2028 versus consensus at 19%. This translates to EPS estimates 10% above consensus in 2027 and 20% above in 2028. For third-quarter results due October 27, UBS expects management to highlight improving visibility supported by advanced logic, memory, and mature-node demand. The stock currently trades at 7.9 times 12-month forward EV-to-sales versus its 10-year average of 5.7 times.
3. STMicroelectronics NV (NYSE: STM) (Buy, €80 price target)
STMicroelectronics completes UBS's top three picks, with the analyst's 2027 EPS estimate approximately 20% above current consensus expectations. UBS forecasts silicon photonics revenues reaching roughly $2.0 billion in 2027 and $2.5 billion in 2028. Combined with AI power products, total datacenter revenues are estimated at approximately $2.5 billion in 2027, representing about 14% of group sales, rising to roughly $3.8 billion or 19% of group sales by 2028. For third-quarter results on October 29, UBS expects fourth-quarter revenue guidance up approximately 10% quarter-over-quarter, ahead of normal seasonality.