Why UBS Says ASML Is a 2027 Story Worth Buying Now

Core Viewpoint - ASML Holding N.V. is identified as a significant player in the AI stock market, with a Buy rating from UBS analyst Francois-Xavier Bouvignies and a price target of EUR750.00, indicating a potential inflection point for the company [1] Group 1: Business Outlook - The demand for lithography intensity is expected to increase with the upcoming production of TSMC's A14 logic node, which is crucial for ASML as TSMC is its largest customer for EUV machines [2] - Despite a 20% decline in stock performance over the past year, the market has already accounted for the declining lithography intensity and challenges from the Chinese market, suggesting limited downside risks [3] - The market is anticipated to shift focus to 2027 after Q3 results, where ASML is expected to renew its lithography intensity narrative with the introduction of high NA technology [4] Group 2: Financial Projections - Buyside expectations for ASML's revenue in 2026 range from a low single-digit percentage decline to flat revenue, with UBS estimating a -3% year-over-year change, while consensus anticipates a +3% year-over-year increase [4] - The forecast for DRAM wafer fabrication equipment (WFE) spending in 2026 has improved, with an expected increase of +24% year-over-year, contrasting with a previous decline estimate of -2% year-over-year [4]