ASML Stock Rises After UBS Reinstates It as Top European Semiconductor Pick
Shares of Dutch chip equipment giant ASML moved higher on Wednesday after analysts at UBS restored the company as their leading investment choice in Europe’s semiconductor sector.
The investment bank also increased its price target for ASML to €1,900, up from €1,600, while raising earnings forecasts for 2027 and 2028 significantly above current market expectations.
ASML shares climbed 3.5% in Amsterdam trading by 09:00 GMT, reflecting renewed investor optimism around the company’s long-term growth potential.
ASML Has Underperformed Peers Despite Strong Industry Momentum
Although ASML has posted gains of roughly 40% year-to-date, the stock has lagged behind several semiconductor peers.
Competitors including Applied Materials (AMAT), KLA Corporation and Lam Research have recorded gains ranging between 48% and 70%, while major memory companies such as Micron Technology and SK Hynix have performed even better.
UBS analysts believe this relative weakness presents an attractive buying opportunity.
The bank noted that ASML currently trades at only a 6% premium to large U.S. semiconductor peers based on forward price-to-earnings ratios, compared with a 10-year historical premium averaging 84%.
UBS Sees Strong Risk-to-Reward Potential
According to UBS, ASML now offers one of the most favorable risk-to-reward profiles in the semiconductor industry.
Analysts led by Francois-Xavier Bouvignies highlighted three major reasons behind their bullish outlook.
1. ASML Is Unlikely to Become a Supply Bottleneck
Growing concerns have emerged that ASML’s manufacturing capacity could restrict future semiconductor production.
UBS dismissed these fears, estimating that ASML’s planned 2027 capacity could support more than 50% annual growth in advanced wafer production, comfortably exceeding expected demand growth of 25–30%.
The bank expects ASML to avoid becoming a major constraint on semiconductor supply over the next 12 to 18 months.
Memory Market Exposure Could Become a Major Growth Driver
UBS also emphasized ASML’s heavy exposure to the memory chip market, describing it as one of the company’s most overlooked strengths.
The analysts estimate that 30–35% of ASML revenue could come from memory-related demand by 2026, higher than the 25–30% exposure seen among U.S. competitors.
This positioning has already contributed to stronger performance. Between 2020 and 2025, ASML achieved approximately 23% compound annual growth in memory-related revenue, far ahead of peers averaging around 6% growth.
Demand for increasingly advanced DRAM technology is expected to continue supporting growth through 2028.
High NA EUV Technology Remains a Long-Term Catalyst
UBS maintained confidence in ASML’s next-generation High NA EUV lithography technology, despite slower adoption timelines from major chip manufacturers such as TSMC.
The bank estimates High NA systems could lower manufacturing costs by 20–40% on key production layers, while delivering throughput improvements exceeding 100% compared with alternative technologies.
Analysts believe widespread adoption may occur within the next two to three years, strengthening ASML’s long-term competitive advantage.
UBS Raises Earnings Forecasts Above Market Expectations
Following its revised outlook, UBS now expects ASML to generate:
- 2027 earnings per share (EPS): €48.42
- 2028 earnings per share (EPS): €59.73
These projections sit roughly 15–20% above broader analyst consensus estimates.
UBS concluded that ASML remains one of the few European semiconductor companies still offering particularly attractive upside potential, leading the bank to restore the stock as its top sector pick.
