Palantir shares rise 5% premarket as AI-fueled demand powers annual guidance raise
On Friday, Jefferies updated its financial outlook for ASML Holding NV (AS:ASML:NA) (NASDAQ: ASML) stock, increasing the price target to EUR840.00 from the previous EUR760.00. The firm has maintained its Buy rating.
This adjustment comes as ASML anticipates a surge in demand for its Extreme Ultraviolet (EUV) lithography systems, which are essential for manufacturing advanced logic and DRAM chips.
The heightened demand is expected due to the performance and power consumption requirements of Generation AI, which will likely propel Moore's Law forward. ASML has projected sales growth for the year 2026, signaling a robust future for the company. Despite a reduction in demand forecasts from mature node and strategic investments, the overall outlook remains positive.
The analyst at Jefferies aligns with this optimistic perspective, suggesting that the stock is poised for a re-rating as investor confidence is restored. The revised price target reflects a substantial increase and is indicative of the anticipated greater demand for ASML's EUV systems, which are critical in semiconductor manufacturing.
ASML's EUV technology is at the forefront of enabling miniaturization and performance enhancements in semiconductor chips. The company's growth prospects are closely tied to the semiconductor industry's technological advancements, which continue to evolve rapidly with the progression of artificial intelligence and computing needs.
With the new price target set at EUR840.00, Jefferies signals its expectation that the market will recognize ASML's potential and adjust the valuation of its shares accordingly. The firm's analysis underscores a strong conviction in the company's growth trajectory and its pivotal role in the semiconductor industry.
In other recent news, ASML Holding NV has experienced several financial adjustments and revised forecasts. Cantor Fitzgerald maintained an Overweight rating on ASML shares with a consistent price target of EUR750.00. The firm's analysts anticipate key takeaways from the upcoming Capital Markets Day, including confidence in ASML's 2025 financial targets and potential for 2026 to surpass these targets.
Erste Group revised its rating on ASML shares from "Buy" to "Hold" following a significant decrease in new orders and a downward adjustment of its 2025 revenue forecast. Bernstein SocGen Group and Citi also adjusted their stance on ASML, reducing their price targets while maintaining positive ratings.
CEO Christophe Fouquet projects growth in 2026 despite a warning of slower expansion in 2025 due to weak electronics markets. The company's Q3 2024 results revealed total net sales of €7.5 billion and a gross margin of 50.8%. Projections for Q4 2024 net sales are estimated to be between €8.8 billion and €9.2 billion.
Despite these challenges, several analysts from firms such as JPMorgan and BofA Securities express confidence in ASML's ability to navigate these changes, anticipating growth in non-China deep ultraviolet revenues and expecting extreme ultraviolet revenues to increase by 41% next year. These are recent developments in ASML's financial trajectory.
InvestingPro Insights
ASML's strong market position and financial performance align with Jefferies' optimistic outlook. According to InvestingPro data, ASML boasts a substantial market capitalization of $269.74 billion, reflecting its dominant status in the semiconductor equipment industry. The company's P/E ratio of 37.01 indicates that investors are willing to pay a premium for its shares, likely due to its growth prospects and technological leadership in EUV lithography.
InvestingPro Tips highlight ASML's financial strength and market performance. The company has maintained dividend payments for 18 consecutive years, demonstrating consistent shareholder returns. This aligns with the positive outlook on ASML's future demand and growth potential. Additionally, ASML's cash flows can sufficiently cover interest payments, suggesting a solid financial foundation to support its anticipated expansion in EUV system production.
While the stock has seen a significant return over the last week, it's trading at high valuation multiples across various metrics. This could indicate that the market is already pricing in some of the growth expectations outlined in the Jefferies report. Investors considering ASML may find value in exploring the additional 14 InvestingPro Tips available, which could provide further insights into the company's financial health and market position.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.