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Investing.com - UBS has reiterated its Buy rating on ASML Holding NV (AS:ASML) (NASDAQ:ASML) with a price target of EUR750.00, maintaining its positive outlook despite near-term headwinds. The semiconductor equipment giant, currently valued at $310 billion, has demonstrated robust financial health with a 26.4% revenue growth over the last twelve months. According to InvestingPro data, analyst consensus remains bullish with price targets ranging from $602 to $981.
The investment bank acknowledges investor concerns about buying into what it calls a "2027 story" while the company faces short-term challenges, but believes significant downgrades are unlikely despite potentially weak orders in upcoming quarters. ASML’s strong market position is reflected in its impressive track record, including 19 consecutive years of dividend payments and maintaining healthy profit margins above 52%. Get deeper insights into ASML’s financial metrics and growth potential with InvestingPro.
UBS notes that market expectations for ASML’s 2026 performance now range between a low-single-digit percentage decline to flat revenue, compared to UBS’s estimate of a 3% year-over-year decline and consensus expectations of 3% growth.
Recent developments in memory technology should protect ASML from further downside, with UBS now expecting 24% year-over-year growth for DRAM wafer fabrication equipment in 2026, revised from a previous forecast of a 2% decline.
UBS expects the market to shift focus to 2027 following ASML’s third-quarter results, which should include directional guidance for 2026, marking what the firm sees as a renewal of the lithography intensity story as ASML begins outperforming the wafer fabrication equipment sector with the introduction of high numerical aperture technology.
In other recent news, ASML Holding NV has made a significant investment in Mistral AI, leading a €1.3 billion Series C funding round and acquiring an 11% stake in the AI company. This move also establishes a strategic partnership aimed at enhancing AI applications within ASML’s operations and product offerings. In addition to this development, UBS has upgraded ASML’s stock to a Buy rating, increasing the price target to €750, highlighting the company’s potential as a "quality compounder."
Conversely, BofA Securities has lowered its price target for ASML to €724 due to concerns over booking estimates in the upcoming quarters. Erste Group has downgraded ASML’s stock from Buy to Hold, citing uncertainties in revenue growth prospects for 2026. Similarly, Freedom Broker has also downgraded ASML to Hold, despite the company surpassing expectations in its Q2 earnings report. However, ASML’s management has reaffirmed its fiscal year 2025 targets amidst mixed guidance for the third quarter. These developments reflect the complex landscape ASML navigates amid macroeconomic and geopolitical challenges.
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