ASML has traveled in essentially one direction. The stock hit an all-time high last week, slipped afterward, and rallied again as most of the chip names moved back into rally mode. It traded around 1851 on the session, up 4.6% early and 4.8% later in the morning, with investors buying the semiconductor group broadly.
The Bernstein Call
Bernstein issued a bullish note arguing there's room for a strong short-term move higher, which helped push the shares up more than 4%. The firm lifted its price target on the US-listed shares to 2623, up from 1971. That implies roughly 48% upside from where the stock closed on Thursday. Bernstein kept its outperform rating.
The target rests on a valuation of 40 times earnings, raised from 35, a level Bernstein characterizes as one standard deviation above the historical mean. Two forces drive the thesis: an acceleration in the capital expenditure cycle and rising lithography intensity. The firm's view is that ASML's lithographic manufacturing technology can gain traction inside the AI industry, positioning the stock for strong returns in the near future.
Raised Forecasts
Bernstein materially increased its top-line forecast following what it called an unprecedented, AI-driven expansion in both advanced logic and DRAM capacity. For EUV lithography systems, which include the high NA machines, the firm raised its 2027 shipment forecast to 91 units from 86. The 2028 projection jumped to 113 units from 87, a large step up for that year.
On the revenue side, Bernstein expects EUV revenue tied to those delivery units to grow at a 30% compound annual rate, which sits more than 30% higher than the current street estimate. Overall revenue is projected to grow at a 20% compound annual rate, about 24% above the consensus estimate. Looking to 2028, the firm sees earnings per share running roughly 35% above consensus.
The Memory-First Adoption Thesis
A distinctive part of the argument concerns who adopts high NA EUV first. Bernstein expects memory chip makers to move ahead of logic makers. The reasoning turns on physical geometry: DRAM die size is smaller and requires only a single mask, while logic dies are larger and need two masks. That difference makes the economics work sooner for memory.
The firm sees SK Hynix and Samsung likely to adopt high NA for DRAM production in 2027. Intel and logic follow in 2028, and TSMC arrives in 2030. Because the note spans the supply chain rather than a single name, Bernstein also upgraded TSMC and adjusted price targets on Samsung, SK Hynix, and Micron. ASML remains the firm's pick for a good short-term play.
The Risks
Bernstein did flag downside. ASML's target gross margins came in slightly below expectations because of the cost of commercializing the EUV technology. The firm also pointed to a larger-than-expected inventory buildup in China as a risk, along with a weaker-than-expected wafer fab equipment market and export controls affecting customers in China. Even with those caveats, the note reads as strongly bullish, and the stock has climbed more than 12% over the past month.
How to Trade It
For an aggressive, high-risk setup, one approach is a 1780/1700 short put spread, aiming to collect a credit of $27 or higher. Short put spreads generally carry an inverse reward-to-risk profile, so momentum and trend matter a great deal here.
The technical picture is where the trade lives or dies. The stock faces a key resistance level at 1900, and clearing it looks fairly definitive for the near-term direction. Getting above 1900 this week would set up a strong run toward the all-time high, which sits around 1999. Above that, every $25 increment becomes a resistance checkpoint. If the stock reaches that range, the position could capture 50% of the potential, turning it into a large winner. The whole thesis hinges on that push through 1900 toward 1999.
