Is this U.S.-China selloff a buy? A top Wall Street voice weighs in
Investing.com - Bernstein SocGen Group raised its price target on ASML Inc. (NASDAQ:ASML) to $935.00 from $743.00 on Thursday, while maintaining a Market Perform rating on the semiconductor equipment maker. According to InvestingPro data, ASML currently trades at $987.81, with a P/E ratio of 35.4x and market capitalization of $382 billion.
The price target increase follows a more than 50% rally in ASML shares over the past two months, which Bernstein attributes to several positive industry developments. These include Samsung restarting its Taylor fab, TSMC accelerating U.S. capacity buildout, and expectations of an HBM and DRAM upcycle. InvestingPro data confirms this strong momentum, showing a 44.4% return over the past six months and trading near its 52-week high of $1,059.Want deeper insights? InvestingPro subscribers have access to 16 additional ProTips and comprehensive financial analysis for ASML.
Bernstein expects ASML to guide for growth in 2026, with increased EUV (extreme ultraviolet lithography) demand likely from the DRAM sector. The firm also expressed more positive sentiment regarding DUV (deep ultraviolet) equipment sales to China. The company’s strong financial health, evidenced by its GREAT overall score on InvestingPro, supports this growth outlook, with revenue growing 26.4% in the last twelve months and a healthy gross profit margin of 52.5%.
Despite previous concerns about overstocking, Bernstein revised its forecast for ASML’s China revenue in 2026, now projecting a 16% decline versus its previous estimate of a 23% drop. This improved outlook assumes no additional regulatory restrictions are implemented.
The firm noted that China’s ban on H20 equipment and pursuit of domestic AI chip development will necessitate more advanced capacity additions, with Bernstein anticipating increased leading-edge buildout beginning in 2025 and potentially accelerating in 2026.
In other recent news, ASML Holding NV is set to release its September quarter earnings report on October 15, with HSBC predicting the results and December quarter guidance to align with expectations. HSBC has raised its price target for ASML to EUR1,018.00, maintaining a Buy rating based on the company’s growth outlook for 2026. Similarly, UBS has increased its price target to EUR940.00, citing AI-led growth, while also keeping a Buy rating. However, New Street Research has downgraded ASML from Buy to Neutral, expressing concerns over the company’s growth prospects beyond 2026, despite a robust AI spending outlook. Goldman Sachs continues to support ASML with a Buy rating and a price target of EUR935.00, highlighting the company’s advantage in the AI-driven demand for advanced Logic/Memory. Additionally, ASML confirmed that Bruno Le Maire, France’s former finance minister, is no longer serving as an advisor to the company. These developments reflect a mix of optimism and caution among analysts regarding ASML’s future performance in the semiconductor equipment sector.
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