Why One Analyst Thinks ASML Is Worth $1,971

Core Viewpoint - Bernstein has raised ASML's price target to $1,971, projecting significant growth in EUV shipments to DRAM customers, which are expected to more than double from 18 units in 2025 to 44 units in 2028 [2][7]. Group 1: Financial Performance - ASML's EUV systems revenue grew 39% year-over-year to $13.47 billion in 2025, with a record Q4 order intake of $15.28 billion, including $8.60 billion in EUV orders, resulting in a contracted backlog of $45.06 billion [2][12]. - The company has experienced a remarkable stock performance, gaining 91% over the past year and 16% year-to-date [4]. Group 2: Market Dynamics - The widening supply-demand gap in DRAM is driving memory makers to accelerate capital spending, positioning ASML as a crucial supplier for AI infrastructure [3][10]. - Bernstein forecasts that ASML will ship 44 EUV machines to DRAM customers in 2028, representing 45% of total EUV shipments that year, indicating a shift towards higher-margin products [7]. Group 3: Future Projections - To reach the $1,971 target, ASML must execute on its 2026 revenue guidance of $39.49 billion to $45.30 billion, continue accelerating EUV shipments, and offset revenue declines from China with growth in Taiwan and South Korea [9][10]. - ASML's long-term revenue target for 2030 is set between €44 billion to €60 billion, supported by a €12 billion share buyback program through 2028 and a 17% dividend increase to €7.50 per share [12].