Prediction: ASML Stock Could Surge 70%, According to a Wall Street Analyst

Core Insights - ASML's pivotal role in the global chip market positions the company for increased orders as customers ramp up capital spending [1][2] - The stock has surged 75% over the past year, outperforming the PHLX Semiconductor Sector index, which gained 47% [1] Group 1: Demand and Market Position - ASML's extreme ultraviolet (EUV) lithography machines are essential for manufacturing advanced chips, particularly in high-demand AI applications [2][3] - Investment bank Morgan Stanley forecasts that the demand for AI chips will sustain, potentially leading to further stock price increases for ASML [3] Group 2: Capital Expenditure and Growth Projections - Morgan Stanley predicts that increased semiconductor manufacturing capacity by companies like TSMC and Micron will drive ASML's stock up by 70% [4] - TSMC plans to increase its capital spending by 32% in 2026 to $54 billion, with a significant portion allocated to advanced chip production [6][7] - Micron Technology is set to invest $20 billion in capital expenditures this fiscal year, a 45% increase from the previous year, to address memory chip shortages [7] Group 3: Earnings Forecasts - Analysts expect ASML's earnings per share to nearly double by 2027, with Morgan Stanley estimating earnings of $53.85 per share [6][11] - The consensus estimates suggest ASML will finish 2025 with earnings of approximately $29.01 per share, with growth anticipated to accelerate in 2027 [9][11] - If ASML's stock trades at the U.S. technology sector's average earnings multiple of 44.7, the stock price could reach $2,407, representing an 81% potential increase from current levels [12]