Prediction: ASML Stock Is Going to $3,000 in 3 Years

ASML Holding (NASDAQ: ASML) is one of the most important semiconductor companies in the world, as it manufactures advanced chipmaking equipment that's used by foundries and memory companies to fabricate cutting-edge chips.

ASML's extreme ultraviolet (EUV) lithography machines help customers produce chips with high transistor density, resulting in higher computing power and lower power consumption. These leading-edge chips are 7 nanometers (nm) or smaller. It is worth noting that chip designers and consumer electronics companies have been using advanced 5nm and 3nm process nodes to fabricate chips deployed in artificial intelligence (AI) data centers, smartphones, personal computers (PCs), and even gaming consoles.

As ASML is the only manufacturer of EUV lithography machines, it is witnessing solid demand for its products. The company released its second-quarter results earlier this month, and they clearly indicate that it is poised to deliver years of solid growth.

Let's look at the reasons why this semiconductor stock seems primed to deliver solid upside over the next three years, potentially hitting a $3,000 price during this period.

Image source: ASML.

ASML's addressable market will expand rapidly

ASML's Q2 revenue increased 21% year over year to 9.3 billion euros. It sold 86 new lithography systems during the quarter, up from 67 in the year-ago period. The company's earnings per share increased by an impressive 28% year over year to 7.59 euros per share.

The company's sales exceeded the higher end of its guidance range, driven by the growing demand for its advanced chipmaking equipment that's used for making AI chips. Importantly, ASML sees continued investments in advanced chipmaking capacity to support the AI infrastructure build-out. CEO Christophe Fouquet noted on the latest earnings call:

In logic, there is a continued investment, not only to enable the expansion of 3 nm capacity in support of the latest generation of AI accelerators, but also at both the 5 nm and the 4 nm nodes to support the diverse set of chips required by AI product. At the same time, the 2 nm node continues to ramp rapidly to support next generation HPC and mobile applications.

Fouquet added that its customers are planning to invest in even more advanced 1.4 nm chip nodes. As a result, the company expects its foundry-related revenue to increase by 25% in 2026. On the other hand, ASML is capitalizing on the memory supply crunch. The company notes that its memory customers are on track to significantly expand their production capacity in 2026 to fill the supply gap in the memory industry.

ASML notes that memory infrastructure expansion will continue beyond 2026. That's not surprising, as South Korean semiconductor giants SK Hynix and Samsung are expected to spend a whopping $870 billion in capex over the next decade to build more manufacturing capacity. ASML sees a 75% jump in memory-related sales this year, and it can continue experiencing impressive growth in this segment over the long run as memory manufacturers bring additional capacity online.

All this explains why ASML has increased its 2026 revenue guidance to a range of 43 billion euros to 45 billion euros. That's well above the company's revenue forecast of 34 billion euros to 39 billion euros at the beginning of the year. The midpoint of the current revenue guidance suggests that ASML's revenue is on track to increase by 35% this year, well above the 15% growth it reported last year.

The discussion above suggests that ASML can sustain this impressive growth beyond 2026. Industry association SEMI forecasts a 23% increase in sales of semiconductor manufacturing equipment in 2026 to $166 billion. It expects this market's revenue to increase to $229.5 billion in 2028. So, it is easy to see why analysts have increased their revenue growth expectations from ASML following its latest quarterly report.

Data by YCharts

The math behind ASML's $3,000 price target

The Dutch semiconductor bellwether's robust top-line growth will filter down to its bottom line as well. Consensus estimates project a 53% jump in ASML's earnings per share in 2026, followed by solid double-digit gains in 2027 and 2028.

Data by YCharts

However, the build-out of additional chipmaking capacity can help this semiconductor stock exceed expectations. However, even if ASML's earnings per share increase to $75.08 in 2028 and it trades at 40 times earnings at that time (in line with its forward price-to-earnings ratio), its stock price could jump to just over $3,000.

A forward earnings multiple of 40 seems conservative when we consider that the iShares Semiconductor ETF, an exchange-traded fund that tracks the semiconductor sector, has a price-to-earnings ratio of nearly 70. A $3,000 stock price suggests that ASML could jump 81% from current levels, which is why it seems like a good idea to buy this AI stock and hold it for the long run following its 10% slide in July.

Harsh Chauhan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends ASML and iShares Trust-iShares Semiconductor ETF. The Motley Fool has a disclosure policy.