ASML hits record high on AI boost and analysts see further room to run

Dutch semiconductor equipment company ASML has held gains to hit record highs, following Taiwanese chipmaker TSMC’s strong earnings report on Thursday.

ASML — Europe’s most valuable company and the world’s only supplier of the complex photolithography machines needed to manufacture the most advanced artificial intelligence chips — has seen shares rise around 7% since TSMC’s earnings were released.

The company became just the third European company to see its valuation tick above the half-trillion dollar mark on Thursday, seeing its market cap hit around 450 billion euros ($522 billion). ASML’s stock has rallied 25% so far in 2026.

Morgan Stanley on Thursday said in its bull case the Dutch company’s stock could have a surge of 70% ahead as chipmaker spending continues to rise to meet AI demand. That scenario sees shares rise up to 2,000 euros if tech valuations continue to spike and profits beat expectations, the bank added, while its price target is 1,400 euros.

“Higher 2027 foundry and memory capex as well as better than feared China demand drives our conviction for higher FY27 earnings,” the Morgan Stanley note said. “We expect order intake over the next 2-3 quarters to confirm this strength.”

TSMC’s capex guidance “significantly” exceeded prior expectations, Bank of America said in an analyst note on Friday, underpinning near-term upside for ASML “as EUV [extreme ultraviolet] and advanced deposition tools become critical for efficiency gains.”

Companies embedded in the global AI race have seen strong performances as demand for the technology has soared.

The start of 2026 has seen a stock rally among companies providing memory chips, which are crucial components to advanced semiconductors designed by Nvidia and AMD. Memory prices are expected to rise another 40-50% in Q1 of 2026, according to Counterpoint Research.

“ASML stock has been on a tear due to the potential for strong capex at semi manufacturers starting late ’26,” JPMorgan said in a note on Wednesday. “Samsung, the only DRAM major with available clean room capacity, is likely to increase orders most significantly in the quarter, while TSMC orders are also likely to be strong.”

DRAM, referring to Dynamic Random Access Memory, is a type of memory chip needed to store data required for AI processing.

Earlier this month, major Nvidia partner Foxconn — the world’s largest contract electronics manufacturer and maker of servers that hold chips in data centers — reported a 22% surge in revenues in the final quarter of 2025.

TSMC, which is ASML’s largest customer, got another boost on Thursday as the U.S. announced it would limit tariffs on Taiwan to 15%, with chip and technology companies from the country investing at least $250 billion in production capacity in the U.S.

ASML is due to report its fourth-quarter earnings on Jan. 28.