ASML Stock Slides 7% But Analysts See a “Very Attractive” Entry Point

TLDR

• ASML’s U.S.-listed stock has dropped 7% in the past month, largely due to a rotation away from AI-exposed semiconductor stocks.
• TD Cowen analyst Krish Sankar has a Buy rating on ASML with a price target of €1,500 (~$1,735).
• ASML’s valuation premium over peers has shrunk from 120% to around 20% since late 2022.
• Future logic and DRAM chip generations are expected to require more use of ASML’s EUV tools.
• Nvidia’s Jensen Huang now forecasts $1 trillion in AI chip orders through 2027, boosting the long-term demand case for ASML.

ASML has pulled back from recent highs, and at least one analyst thinks that’s a buying opportunity. TD Cowen’s Krish Sankar called the current setup “very attractive,” pointing to a compressed valuation and a strong long-term growth case tied to AI chip demand.

ASML Holding N.V., ASML

ASML’s U.S.-listed stock is down 7% over the past month. The drop came as investors rotated out of semiconductor stocks tied to the AI boom, even as ASML reported record orders for its lithography machines.

The company sits at a unique spot in the chip supply chain. It holds a near-monopoly on extreme ultraviolet (EUV) lithography systems, the machines used to manufacture the most advanced chips. No other company makes them.

Since late 2022, ASML’s valuation premium over semiconductor equipment peers like Applied Materials, Lam Research, and KLA Corp has dropped from 120% to roughly 20%. Sankar links that compression to chip manufacturing methods that currently make lighter use of ASML’s EUV tools.

But Sankar argues that’s about to change. The next generations of both logic chips and memory chips — specifically DRAM — will need more EUV layers. He says the memory angle in particular is “underappreciated” by the market.

High-NA EUV: The Next Growth Driver

ASML’s newest machines, the High-NA EUV systems, are still in early commercial rollout. The company confirmed revenue from just two of these units in Q4 2025, compared to 94 standard lithography systems sold in the same period.

TSMC has been cautious about publicly committing to High-NA EUV. The chipmaker has suggested it can extend the life of existing machines. But Sankar believes improved reliability of the new systems will eventually win customers over.

TD Cowen models 60 lithography systems shipped in 2026, growing to 68 in 2027 as High-NA units double and older models shift to updated versions.

Sankar has a Buy rating on ASML’s Amsterdam-listed stock with a €1,500 price target, based on 48x his 2027 earnings per share forecast. ASML’s Amsterdam-listed stock was trading at €1,165 on Thursday. The U.S.-listed stock was down 1.4% at $1,347.40 in premarket trading.

AI Spending Fuels Long-Term Demand

The demand backdrop for ASML remains strong. Nvidia CEO Jensen Huang, speaking at GTC 2026 on March 16, raised his AI chip order forecast to at least $1 trillion through 2027. Broadcom CEO Hock Tan has separately forecast $100 billion in AI chip revenue for fiscal 2027 alone.

Amazon, Microsoft, Google, and Meta are expected to collectively spend close to $600 billion in capital expenditures in 2026, with a large portion going to AI infrastructure.

ASML also benefits from a recurring revenue stream. Servicing its installed base of machines in the field accounted for about a quarter of total 2025 sales.

ASML currently trades at a forward P/E of 39.8, above its 10-year median of 35.8. Its market cap sits at around $527 billion.

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