Why Analysts Say ASML Is the Top Semiconductor Pick Heading Into 2026

Core Insights - ASML Holding N.V. is highlighted as a key player in the AI stock market, with Morgan Stanley maintaining an Overweight rating and a price target of €1,000.00, driven by strong lithography demand [1] - The company is positioned as a Top Pick in European semiconductors, benefiting from a strengthening demand across memory and logic sectors, with expectations of healthier margins leading into 2026 [1] Group 1: Demand and Market Position - The anticipated DRAM cycle and foundry spending are expected to bolster ASML's order book and sales through fiscal years 2026 and 2027, supported by a recent trip to Asia that reinforced the belief in a memory supercycle [2] - Analysts have noted "unprecedented memory demand" with limited visibility on DDR5 inventory and tightness in DDR4, positioning ASML to benefit from ongoing DRAM demand and strong memory pricing [3] Group 2: Capacity and Production Insights - TSMC's decision to add 3nm capacity in Taiwan rather than Japan is likely to increase foundry spending, translating into more 3600d shipments in fiscal year 2026 and providing near-term EUV sales upside for ASML [4] - ASML specializes in developing and selling advanced semiconductor equipment, including lithography, metrology, and inspection systems for chip manufacturing [4]