Bank of America analysts have raised their estimates and price target for ASML Holdings (AS:ASML), citing growing confidence that the company will achieve €40 billion in revenue by 2025.
The investment bank has hiked its 2025/26 revenue and earnings per share (EPS) estimates by roughly 6-9% to reflect the rising demand for its EUV tools and growing gross margins.
BofA also reiterated ASML as their Top Pick.
Moreover, the bank raised its price target on the stock from €1,156/US$1,213 to €1,302/US$1,406, citing higher EBITDA compound annual growth rate (CAGR), sector multiple expansion “and AI scarcity value in Europe.”
“ASML remains irreplicable in the buildout of AI infrastructure with all AI processor and DRAM companies using EUV technology to manufacture their chips,” analysts said.
“While some concerns remain about foundry orders through the end of this year, we believe that the pace of investment from all leading hyperscalers and enterprise customers in AI infrastructure leaves very doubt that significant capacity needs to be added at the leading edge,” they added.
ASML's Europe-listed shares rose 2% on Thursday.