ASML Stock: Breaks $500 Billion Market Cap on TSMC Earnings Rally

TLDR

• ASML stock surged to an all-time high, pushing its market cap past $500 billion for the first time
• The rally was sparked by TSMC’s strong earnings, which showed 35% profit growth to $16.3 billion
• RBC Capital initiated coverage with an Outperform rating and $1,550 price target
• ASML shares jumped over 7% in Thursday trading, reaching €1,167 per share
• Multiple analysts raised price targets citing AI demand, tight DRAM supply, and EUV lithography growth

ASML shares rocketed to a record high on Thursday, pushing the Dutch chipmaking equipment manufacturer past the $500 billion market cap milestone. The stock jumped over 7% in early trading, hitting €1,167 per share.

ASML Holding N.V., ASML

The rally came on the heels of blockbuster earnings from Taiwan Semiconductor Manufacturing Company. TSMC reported net income of $16.3 billion, up 35% year-over-year and above analyst expectations.

ASML’s market value reached approximately 443 billion euros, or $515 billion, as of morning trading. This cements its position as Europe’s most valuable company.

The connection between the two companies is direct. TSMC purchases advanced photolithography machines from ASML for its chip manufacturing operations. When TSMC thrives, ASML typically benefits.

The rally wasn’t isolated to ASML alone. European semiconductor stocks saw broad gains across the board following TSMC’s results.

ASML shares were trading around 5% higher by mid-morning GMT. The stock has now posted a 73.91% total return over the past year.

Analyst Confidence Builds

RBC Capital jumped into the conversation on Wednesday, initiating coverage on ASML with an Outperform rating. The firm set a price target of $1,550, well above the current trading price of around $1,264.

RBC pointed to improving wafer fab equipment spending as a key driver. The firm also highlighted secular growth in extreme ultraviolet lithography technology.

The analysts expect these trends to continue through 2026 and 2027. They cite strong demand for generative artificial intelligence applications as the primary fuel.

DRAM supply remains extremely tight according to RBC. EUV intensity is increasing across the industry. Samsung’s potential rebound in HBM4 memory represents another catalyst.

In the logic segment, GenAI accelerators are moving to more advanced nodes. Foundry competition is heating up again.

Valuation and Growth Outlook

RBC noted that ASML’s valuation premium over U.S. peers has compressed. The firm views this as an attractive entry point for investors.

China-related risks appear largely priced into the stock already. ASML’s services business should maintain double-digit growth going forward.

The company currently trades at a P/E ratio of 44.75. Analyst price targets range from $843.92 to $1,520.48.

ASML outperformed the SOX semiconductor index in 2025. The stock has gained 58.02% over the last six months alone.

The semiconductor equipment maker sits at the center of the global chip manufacturing ecosystem. Its EUV lithography machines are essential for producing the most advanced chips.

TSMC provided a solid outlook for future quarters in its earnings report. This forward guidance likely contributed to the enthusiasm around ASML shares.

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