Where Will ASML Stock Be in 1 Year?

Core Viewpoint - ASML Holding is positioned for significant growth in the semiconductor industry, particularly driven by demand for advanced chip manufacturing technologies, especially in AI applications [1][10]. Company Performance - ASML's stock has gained 49% over the past year, with most gains occurring in the last three months, following a challenging previous year due to geopolitical issues and a slowdown in certain semiconductor sectors [2][3]. - The company reported a revenue guidance for 2025 between 30 billion euros and 35 billion euros, which was lower than its initial expectations [3][5]. Future Outlook - ASML is optimistic about achieving growth in 2026, with management stating that total net sales for 2026 are not expected to fall below 2025 levels [6][11]. - The company saw a significant increase in net bookings, reaching 5.4 billion euros last quarter, up from 2.6 billion euros in the same period last year [6][7]. Demand for Products - Two-thirds of ASML's recent bookings were for extreme ultraviolet (EUV) lithography systems, totaling 3.6 billion euros, a substantial increase from 1.4 billion euros a year ago [7][8]. - The demand for EUV systems is driven by the need for advanced chips manufactured on smaller process nodes, particularly for AI applications [8][9]. Market Trends - TSMC, a key customer, derived 60% of its Q3 revenue from 3nm and 5nm chips, with 87% of its revenue coming from high-performance computing and smartphone applications [9]. - Market research indicates a 51% increase in shipments of generative AI smartphones in 2026, and AI infrastructure capital spending by major tech companies is projected to reach $490 billion, up from a previous estimate of $420 billion [10][11]. Analyst Expectations - The median 12-month price target for ASML is $1,140, suggesting a potential increase of 7% from current levels, with earnings growth expectations for 2026 at 5% [12][13]. - Recent adjustments by analysts indicate a positive outlook, with 17 analysts raising their earnings expectations for 2026, driven by strong order inflow and anticipated spending on AI chips [13][14].