ASML Shares Surge to Record Highs, Fueled by AI Demand and TSMC’s Strong Earnings
ASML Holding NV, the Dutch semiconductor equipment giant, has seen its shares climb to unprecedented levels, buoyed by robust earnings from Taiwanese chipmaker TSMC. This surge positions ASML, Europe’s most valuable company, at the forefront of the global artificial intelligence chip manufacturing ecosystem.
The company, the sole provider of the highly complex extreme ultraviolet (EUV) photolithography machines essential for producing cutting-edge AI chips, has experienced a significant uptick in its stock value. Following TSMC’s impressive earnings report, ASML’s shares have risen approximately 7%, underscoring the symbiotic relationship between these industry titans.
On Thursday, ASML achieved a significant valuation milestone, becoming only the third European company to surpass the half-trillion-dollar market capitalization mark. Its market value reached approximately 450 billion euros, equivalent to $522 billion. Year-to-date, ASML’s stock has demonstrated a remarkable rally, climbing 25% in 2026 alone.
Industry analysts are expressing strong optimism for ASML’s future performance. Morgan Stanley, in a recent bull case scenario, projected a potential 70% surge in ASML’s stock price, driven by the escalating chipmaker capital expenditures aimed at satisfying the insatiable demand for AI technologies. This optimistic outlook suggests shares could reach up to 2,000 euros, assuming continued tech valuation expansion and earnings exceeding expectations. The investment bank has set a price target of 1,400 euros for the stock.
A Morgan Stanley note highlighted its confidence in ASML’s earnings potential, citing “Higher 2027 foundry and memory capex as well as better than feared China demand.” The report further anticipates that “order intake over the next 2-3 quarters to confirm this strength.”
Bank of America echoed this sentiment in a Friday analyst note, observing that TSMC’s capital expenditure guidance “significantly” surpassed previous forecasts. This bullish outlook directly benefits ASML, particularly as “EUV [extreme ultraviolet] and advanced deposition tools become critical for efficiency gains.”
The broader semiconductor industry, especially companies integral to the AI value chain, has witnessed exceptional performance as the demand for AI-driven technologies continues its upward trajectory. The early part of 2026 has seen a notable stock rally among memory chip manufacturers, crucial suppliers for advanced semiconductors designed by industry leaders such as Nvidia and AMD. Counterpoint Research forecasts a further 40-50% increase in memory prices during the first quarter of 2026.
JPMorgan, in a Wednesday note, pointed to ASML’s stock performance being driven by “the potential for strong capex at semi manufacturers starting late ’26.” The investment bank anticipates that Samsung, possessing significant available clean room capacity, will likely lead in increased orders, with TSMC’s orders also expected to remain strong.
Dynamic Random Access Memory (DRAM), a critical type of memory chip, is indispensable for processing the vast amounts of data required for AI applications. The increasing demand for these chips directly influences the need for advanced manufacturing equipment, such as that supplied by ASML.
In a related development, Foxconn, a key Nvidia partner and the world’s largest contract electronics manufacturer, reported a significant 22% revenue surge in the final quarter of 2025, reflecting the booming demand for servers and data center components.
TSMC, ASML’s principal customer, also received a boost from a recent U.S. announcement to limit tariffs on Taiwan to 15%. This policy supports Taiwanese chip and technology companies that are making substantial investments, at least $250 billion, in expanding their production capacity within the United States.
ASML is scheduled to release its fourth-quarter earnings report on January 28th, with investors keenly awaiting further insights into the company’s performance and its outlook amidst the ongoing AI boom.
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