UBS Reiterates Buy Rating on ASML with EUR750 Price Target, Citing Lithography Business and TSMC's A14 Logic Node Production

UBS analyst Francois-Xavier Bouvignies reiterated a Buy rating on ASML Holding N.V. with a EUR750.00 price target, citing the company's lithography business as a 2027 story worth buying now. Bouvignies is bullish on the demand for lithography intensity due to the upcoming production of TSMC's A14 logic node. Despite near-term headwinds, the analyst sees limited downside risks and an attractive long-term outlook.

UBS analyst Francois-Xavier Bouvignies has reiterated a Buy rating on ASML Holding N.V. (ASML) with a EUR750 price target, citing the company's lithography business as a compelling investment opportunity for 2027. The analyst is bullish on the demand for lithography intensity, driven primarily by the upcoming production of TSMC's A14 logic node. Despite near-term headwinds, Bouvignies sees limited downside risks and an attractive long-term outlook for ASML.

ASML, a global leader in semiconductor manufacturing equipment, is expected to benefit from the mass production of TSMC's A14 node and the adoption of High NA lithography by Samsung and Intel. UBS expects significant performance expansion in 2027, with High NA shipments accounting for approximately 30% of ASML's overall revenue growth in that year. Bouvignies also highlights the potential for new customer announcements from Intel and Samsung as catalysts for growth.

The analyst acknowledges investor concerns about buying into a "2027 story" while the company faces short-term challenges. However, UBS's positive outlook is supported by ASML's strong market position, reflected in its 19 consecutive years of dividend payments and healthy profit margins above 52%. The investment bank also notes that 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.

UBS expects the market to shift focus to 2027 following ASML's third-quarter results, which should include directional guidance for 2026. Bouvignies sees this 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 aims to enhance AI applications within ASML's operations and product offerings. Despite mixed guidance for the third quarter, ASML's management has reaffirmed its fiscal year 2025 targets.

Conversely, some analysts have expressed concerns about booking estimates in the upcoming quarters. BofA Securities has lowered its price target for ASML to EUR724, while Erste Group and Freedom Broker have downgraded ASML to Hold. However, UBS maintains its Buy rating, highlighting ASML's potential as a "quality compounder" [1].

ASML's stock has experienced a slight downturn, trading down 3.05% on September 2, 2025, hitting EUR724.00. The company has a market capitalization of EUR142.6 billion, a P/E ratio of 37.53, and a debt-to-equity ratio of 0.32. The firm's 50-day and 200-day simple moving averages are EUR699.99 and EUR670.00, respectively. Despite near-term challenges, UBS's positive outlook on ASML's long-term prospects makes it an attractive investment for investors seeking growth in the semiconductor equipment sector.