ASML stock target lifted at UBS on 'too strong' momentum

Investing.com -- ASML (NASDAQ: ASML) shares have further room to run, UBS analysts say, hiking the price target to €1,400 from €1,030 as they raise earnings estimates and argue that momentum across logic, memory, and China remains “too strong” to ignore.

UBS revised its forecasts ahead of ASML’s fourth-quarter results on January 28. The bank now sees its 2026 and 2027 earnings estimates sitting around 25% above consensus, reflecting stronger-than-expected capital spending signals from leading customers and improving visibility into the next phase of demand.

“In light of potential further upside for 2026/27 due to recent announcements by TSMC, memory players and China, we have revised our estimates up ahead of Q4 earnings,” analysts led by Francois-Xavier Bouvignies said in a note.

The team now expects revenue growth of 23% in 2026 and 14% in 2027, up sharply from prior assumptions, driven by higher expectations in both logic and memory, and China.

For logic and foundry, UBS pointed to TSMC’s 2026 capex guidance of $52–56 billion and forecast a further 7% increase in 2027, leading it to lift its outlook for ASML’s logic-related revenues.

In memory, the bank expects a strong DRAM capex cycle in 2026, driving a 40% surge in ASML’s memory revenues next year.

For China, UBS now expects flat revenues in 2026, compared with a previous forecast for a decline.

“Based on recent capex updates, we expect ASML to provide guidance for 10-20% YoY revenue growth in 2026, with orders potentially hitting towards historical peak of €8-9 billion in Q4,” the analysts continued.

Commenting on near-term concerns around the sustainability of AI investment, the analysts believe these doubts have not derailed customer spending plans.

“While there are clearly doubts around the sustainability of AI investments, we believe momentum is too strong in the near to medium term,” they wrote.

High-NA EUV remains a key part of the longer-term investment case. UBS expects adoption of the technology within the next two years and said it will be critical in supporting ASML’s valuation above historical averages, with further updates on the adoption timeline anticipated this year.

Analysts said the main risks to their outlook stem from the potential for weaker electronics demand due to higher memory prices, as well as the possibility of reduced investment in AI.

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