asml gets a boost: morgan stanley predicts strong earnings growth

2025-09-22 asml

amsterdam, Monday, 22 September 2025.
morgan stanley upgraded asml, setting a price target of €950. this reflects a belief in asml’s potential for significant earnings growth. by 2027, asml’s earnings per share could exceed current estimates by 8%, reaching €33. this positive outlook is based on a cyclical recovery in memory and ai-related demand. effective cost controls also contribute. asml’s strong position in euv lithography is key for advanced chip manufacturing used in ai, further solidifying its market lead.

stock market reaction

The upgrade from morgan stanley had an immediate impact on the market. asml’s stock price in europe rose by 3.5% following the announcement [7]. the investment firm’s decision to upgrade asml from equal weight to overweight signals increased confidence in the company’s financial prospects [2]. this suggests a potential 20% upside from the recent closing price, with the target set at €950 [1]. pre-market trading in the u.s. also saw asml shares rise approximately 3% [3][4].

analyst perspectives

Analysts have mixed views on asml’s future. ubs reiterated a buy rating with a price target of €750, projecting a 20% compound annual growth rate in earnings per share from 2026 to 2030 [1]. conversely, bank of america securities lowered its price target to €724, maintaining a buy rating due to concerns about order estimates influenced by macro and geopolitical factors [1]. erste group downgraded asml to a hold rating, citing uncertainties in revenue growth for 2026 [1]. despite short-term caution, the momentum is expected to shift towards discussions about 2027 [8].

factors driving optimism

Morgan stanley’s optimism is driven by several factors. they anticipate stronger memory chip production, a favorable product mix, and effective cost controls [1]. the firm expects order momentum to increase before the end of 2025, supporting deliveries in late 2026 and 2027 [1]. lee simpson, an analyst, projects fiscal year 2027 earnings per share to reach approximately €33, surpassing consensus estimates by about 8% [8]. this reflects the end of a negative revision cycle and anticipates increased strength, particularly in the memory sector [8].

asml’s strategic moves

asml is actively pursuing strategic opportunities to bolster its market position. the company recently invested €1.3 billion in mistral ai, acquiring an 11% stake [1]. this partnership aims to explore ai applications across asml’s product portfolio, enhancing its lithography systems [1]. despite recent stock gains, morgan stanley believes asml’s share price still reflects conservative assumptions, including flat layer count, weak chinese demand, and minimal sales from major clients [1].

market capitalization and valuation

asml maintains a strong presence in the semiconductor industry. with a market capitalization of $372.31 billion and a p/e ratio of 34.12, the company demonstrates solid fundamentals and consistent cash flows [1]. the valuation of asml shows a strong correlation with dram spot prices [8]. morgan stanley’s global team is increasingly optimistic about the memory market, anticipating euv demand to be supported by new investments [8]. the firm also raised its optimistic scenario target price to €1400 [8].

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