BofA Reaffirms Buy on ASML, Citing DRAM Upside and Recovery Potential in China

Core Insights - ASML Holding N.V. is recognized as a significant player in the semiconductor equipment market, particularly in the context of AI stocks, with a maintained Buy rating and a price target of €986.00 from BofA Securities following a meeting with company leadership [1] Industry Summary - Demand in the DRAM market is currently exceeding supply, with expectations for strong orders in the upcoming quarters, particularly for 2027 capacity additions [2][6] - The development of 2nm logic capacity is projected to continue through 2026-2027, indicating ongoing advancements in semiconductor technology [2][6] - High-NA technology is progressing, although some stitching-related issues remain unresolved; volume orders are anticipated to begin in late 2026 or early 2027, with revenue recognition expected in 2028-2029 [2][6] Company Summary - ASML anticipates a significant decline in sales in China for 2026, projecting a 14% year-over-year decrease, despite foundry and memory fabrication plants operating at full capacity [3][6] - Recovery potential in the Chinese market is expected in 2027, as both memory and logic manufacturers may initiate new fabrication projects [3][6] - The company develops and sells advanced semiconductor equipment, including lithography, metrology, and inspection systems for chip manufacturing [3]