ASML Shares Surge After Aletheia Double Upgrades Stock to Buy

Core Viewpoint - ASML shares experienced an intraday increase of over 8% following a double upgrade by Aletheia Capital, which raised its price target significantly based on improved earnings estimates for fiscal years 2026 and 2027 [1] Group 1: Price Target and Upgrade - Aletheia Capital upgraded ASML's stock rating from Sell to Buy and increased the price target to €1,250 ($1,500 per ADR) from €640 ($750) [1] - The new valuation is based on a 30x fiscal 2027 earnings multiple, reflecting expectations for increased investment and semiconductor capacity upgrades [1] Group 2: Demand Catalysts - Key catalysts for ASML's growth include stronger-than-expected demand for extreme ultraviolet (EUV) lithography tools from DRAM manufacturers and resilient demand for deep ultraviolet (DUV) systems from China in fiscal 2026 [2] - A potential surge in demand from TSMC in fiscal 2027 is also anticipated [2] Group 3: TSMC's Impact - Aletheia estimates that TSMC could install 40 to 45 EUV tools as it expands advanced capacity by 40% to 50% in 2027, which could lift total EUV shipments to 75 to 80 units, nearing ASML's maximum capacity [3] - This expansion is expected to drive low-NA EUV revenue up by approximately one-third in fiscal 2026 and accelerate by 50% to 60% in fiscal 2027 due to higher volumes and a richer product mix [3] Group 4: Sales Growth Projections - Aletheia projects ASML's sales growth to reach the mid-teens in fiscal 2026 and accelerate to the mid-twenties in fiscal 2027, significantly exceeding both company guidance and consensus expectations [4]