A logo on the exterior of the ASML Holding NV headquarters in Veldhoven, Netherlands, on Wednesday, Jan. 24, 2024.
Dutch semiconductor equipment company ASML has held gains to hit record highs, following Taiwanese chipmaker TSMC's strong earnings report on Thursday.
ASML — Europe's most valuable company and the world's only supplier of the complex photolithography machines needed to manufacture the most advanced artificial intelligence chips — has seen shares rise around 7% since TSMC's earnings were released.
The company became just the third European company to see its valuation tick above the half-trillion dollar mark on Thursday, seeing its market cap hit around 450 billion euros ($522 billion). ASML's stock has rallied 25% so far in 2026.
Morgan Stanley on Thursday said in its bull case the Dutch company's stock could have a surge of 70% ahead as chipmaker spending continues to rise to meet AI demand. That scenario sees shares rise up to 2,000 euros if tech valuations continue to spike and profits beat expectations, the bank added, while its price target is 1,400 euros.
"Higher 2027 foundry and memory capex as well as better than feared China demand drives our conviction for higher FY27 earnings," the Morgan Stanley note said. "We expect order intake over the next 2-3 quarters to confirm this strength."
TSMC's capex guidance "significantly" exceeded prior expectations, Bank of America said in an analyst note on Friday, underpinning near-term upside for ASML "as EUV [extreme ultraviolet] and advanced deposition tools become critical for efficiency gains."