RBC Sees Multiple Secular and Cyclical Drivers Supporting ASML Upside

Core Viewpoint - ASML Holding N.V. is recognized as a significant player in the AI stock market, with an Outperform rating initiated by RBC Capital and a price target of $1,550, driven by multiple growth factors in its memory and logic businesses [1][3]. Group 1: Growth Drivers - ASML is expected to outperform the SOX index in 2025 due to increased wafer fab equipment spending and growth in extreme ultraviolet (EUV) lithography, with these trends likely to continue into 2026 and 2027, supported by strong demand from GenAI [2]. - Key catalysts for ASML include a tight DRAM supply, rising EUV intensity, and a potential rebound in Samsung's HBM4 [2]. - The logic segment is seeing a resurgence in foundry competition, with GenAI accelerators adopting more advanced nodes [2]. Group 2: Valuation and Market Position - The valuation premium of ASML over US peers has decreased, making the risk/reward profile more attractive for investors [3]. - ASML specializes in advanced semiconductor equipment, including lithography, metrology, and inspection systems for chip manufacturing [3]. Group 3: Services Business - ASML's services business is projected to continue growing at a double-digit rate, indicating strong ongoing demand and operational strength [2].