Should You Buy ASML Stock Before Jan. 28?

Core Viewpoint - ASML's stock has received a significant upgrade, indicating positive future prospects for the company as demand for advanced chipmaking equipment surges due to the growth in AI chip production [1][3]. Group 1: Stock Performance and Market Sentiment - ASML's shares increased by 73% over the past year, reflecting strong investor interest and confidence in the company's future [1]. - Aletheia Capital upgraded ASML's rating from sell to buy and doubled its price target from $750 to $1,500, which led to a nearly 9% increase in stock price on the first trading day of 2026 [3][4]. Group 2: Demand for Advanced Chips - The demand for advanced chips, particularly those produced using 5nm, 3nm, and 2nm process nodes, is extremely high, with TSMC's 2nm node fully booked for 2026 [6]. - TSMC is expected to increase its capital expenditure to nearly $50 billion in 2026, up from $40 billion to $42 billion in 2025, with a significant portion allocated to advanced chip processing technologies [7]. Group 3: ASML's Market Position - ASML dominates the lithography machine market, controlling over 90% of the DUV lithography market and holding a near-monopoly in EUV lithography, essential for producing advanced chips used in AI applications [5]. - The company received orders worth approximately €4 billion in Q1, €5.55 billion in Q2, and €5.4 billion in Q3, indicating strong order inflow that is expected to continue into 2026 [8]. Group 4: Financial Outlook - ASML's earnings are projected to increase by 28% in 2025, with a 15% rise in revenue, although growth may slow due to tariffs [10]. - For 2026, revenue and earnings are forecasted to grow by 6%, but the company may exceed these expectations due to favorable industry conditions where demand outstrips supply [11]. - ASML's current trading multiple of 34 times forward earnings is considered reasonable compared to the Nasdaq-100 index's multiple of 32 [11].