Bank of America has raised its price target on ASML Holding from EUR 2,452 to EUR 2,557 while keeping a Buy rating on the Dutch lithography equipment maker, betting that the company can push through meaningful price increases from late 2027 onward. The revision rests on the view that ASML’s monopoly position in high-end lithography gives it unusual latitude to charge more for its machines without a proportional rise in costs.
The math behind that thesis is straightforward. According to BofA’s calculations, a 5% increase in selling prices paired with just a 2.5% rise in costs would lift earnings per share by 8%. On that basis, the bank raised its EPS forecast for calendar 2028 by 13% to EUR 85.20, and lifted its revenue estimate for the same year by 8.7% to EUR 76.57 billion. In its optimistic scenario, the analysts see as many as 120 units of ASML’s high-margin EUV systems shipping in that period.
Capacity Expansion Meets a Stretched Order Book
ASML is preparing for sustained growth through the end of the decade, with plans to expand annual production capacity for both extreme ultraviolet (EUV) and deep ultraviolet (DUV) lithography systems by 30% through 2028. The buildout is designed to ensure the company can work through its backlog — EUV orders for 2027 are already largely committed.
Demand from the artificial intelligence segment continues to underpin the near-term picture. After posting revenue above EUR 9 billion in the second quarter, ASML lifted its full-year 2026 sales guidance to a range of EUR 43 billion to EUR 45 billion. SK hynix added to the momentum by announcing it will procure 20 low-NA EUV systems over the next two years.
The geographic mix of that revenue is shifting, however. BofA expects China’s share of ASML’s sales, which stood at 29% in 2025, to fall to roughly 15% by 2028. Regulatory uncertainty — including the US MATCH Act — complicates planning for Chinese customers, though the drag is expected to be largely offset by investment programs at leading chipmakers.
A Potential Move Into Hybrid Bonding
Beyond its core lithography business, ASML may be eyeing an expansion into hybrid bonding, according to a Bloomberg report citing Bank of America. The analysts flagged the potential entry as a tangible threat to BE Semiconductor Industries, downgrading that rival to Neutral and cutting its price target by nearly half.
Should investors sell immediately? Or is it worth buying ASML Holding?
For investors, the discussion matters because ASML has so far anchored its market position mainly through EUV and DUV lithography systems. A push into complementary semiconductor technologies could open additional room for operational growth — and redraw the competitive map in advanced packaging.
Diverging Signals Across the Chip Sector
Even with the robust investment cycle in AI-related leading-edge chips, ASML points to uneven conditions across the semiconductor industry. While AI applications continue to demand high volumes, weaker demand in the automotive and consumer electronics segments is weighing on spending in more traditional markets.
J.P. Morgan analyst Sandeep Deshpande offered another reason for optimism, suggesting ASML could issue guidance for fiscal 2027 that exceeds market expectations when it reports quarterly results, citing reliable visibility on EUV and DUV orders. The stock’s recent trading has been less buoyant: ASML closed Wednesday at EUR 1,613.40, a daily decline of 0.9%, leaving it 7.7% below its 52-week high of EUR 1,748.00. The shares have nonetheless climbed 73% year to date.
Buybacks, Policy Debates and the October 14 Test
Geopolitical scrutiny of the Asian market persists. The Centre for Technology & Statecraft published research examining Chinese chipmakers’ stockpiles of DUV systems and advocated for tighter export restrictions.
ASML, for its part, is pressing ahead with announced capital measures. Under its share buyback program, the company repurchased 277,000 of its own shares between September 28 and October 2. A fuller picture of the business — and the actual order book — arrives on October 14, when ASML publishes its third-quarter 2026 results.
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