Morgan Stanley upgraded ASML to “Overweight” and raised its price target to €950

Morgan Stanley has upgraded ASML Holding NV to “Overweight” from “Equal-weight,” citing a favorable shift in the semiconductor industry driven by artificial intelligence (AI) and a cyclical recovery.

The bank raised its price target for the Dutch chip equipment maker to €950 from €600, implying a potential 20% upside from its last closing price. Following the upgrade, ASML shares surged on Monday.

According to UBS Group AG and Arete Research reports, Morgan Stanley, an American multinational investment bank and financial services firm, secured third position among firms to upgrade ASML’s stock in a month.

Following the strong support system, reports dated September 22 revealed that ASML’s stock increased by up to 3.7%, reflecting a 33% increase, the highest record this year, compared to  September 2, which recorded a low point. 

As a result of its tremendous success, ASML solidified its position as Europe’s largest publicly traded firm this month. This was after its valuation had skyrocketed to €322 billion, worth $379 billion, outperforming that of software company SAP SE and luxury brand LVMH.

ASML’s strong support system vows to take its stock price to the highest level ever

Nigel van Putten, Equity Research Analyst at Morgan Stanley, and Lee Simpson, Managing Director and Senior Equity Analyst at the firm, weighed in on the topic. In a note, they highlighted several growth opportunities extending into 2027, citing their decision to upgrade ASML to an “overweight” rating as an example.

The analysts also projected that logic and memory chip maker advances will strengthen ASML’s business, positioning the company for gains over the next two years.

Meanwhile, the Dutch chip giant’s upgrade has occurred swiftly, as reports reveal that recently, the firm that produces advanced chip equipment had encountered hardship in securing considerable gains from the demand for AI.

Coincidentally, the upgrades from three analysts have taken place alongside the release of positive news from leading suppliers of AI computing resources, such as Oracle Corporation.

On the other hand, Nvidia’s $5 billion investment in Intel Corporation, which was made recently, has enabled the struggling US chipmaker to stabilize itself. Notably, Intel is ASML’s important client and has cut back on its spending for capital this year.

Analysts speculate that the Dutch Chip Giant’s increase in stock price might reach the highest levels ever recorded in history in the near future. These remarks were made after its 14-day relative strength index exceeded 70, suggesting that the stock price might be too high. 

This has sparked discussions among individuals. To address this, the company announced that the actual report might be released on October 15.

ASML’s CEO changes his growth prediction amid trade-related uncertainties 

After predicting that sales would significantly rise in 2026, ASML’s CEO Christophe Fouquet changed his prediction, citing obstacles such as trade conflicts and global tension in the market.

In his earlier prediction in October, Fouquet had convinced investors that 2026 would be a growth year, specifically for the semiconductor industry and ASML. However, this outlook became more cautious after the firm released its second-quarter results.

To explain his sudden shift in prediction, the CEO stated that they continued to experience increased uncertainties because of macroeconomic and geopolitical events. Therefore, according to Fouquet, although they were still preparing for growth in 2026, they could not confirm this.

Following these uncertainties, reports dated July 16 revealed that the Dutch firm’s shares had drastically dropped to €630.70, reflecting a decrease of 11%. This marked their biggest single-day decrease since January 27. Notably, this is not the first time ASML has experienced a decline. Over the past years, the company recorded a total loss of approximately  €140 billion, worth $155 billion. 

In the meantime, it is worth noting that ASML is the only chip producer with essential advanced lithography machines that produce chips for Apple’s smartphones and Nvidia’s AI accelerators. With this, the firm found itself in a tough position between its two largest markets, the US and China, last year due to their worsening relationship.

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