Bank of America says ASML is its top semiconductor stock pick heading into 2026
Bank of America sees further gains ahead for shares of ASML . Analyst Didier Scemama reiterated the semiconductor equipment supplier at a buy rating and listed it as his top pick within the semiconductor space, as well as one of his top picks for 2026. He also hiked his price objective to $1,331 from $1,134, implying a gain of around 20%. Scemama believes that shares of ASML could rise as an inflection in lithography intensity results in the company capturing greater market share in the DRAM market. The analyst sees this reaching an estimated 26% by 2028. ASML YTD mountain ASML YTD chart “Investors have been concerned that litho intensity (the amount of CAPEX dedicated to lithography tools as a percentage of global wafer fab equipment spending) would decline,” he wrote. “After 12-18 months of debate around litho intensity, we think the narrative is about to turn for the better.” Other risks around client concentration and the China market are also set to wane. “Customer concentration risk is easing as Samsung regains competitiveness, Micron accelerates EUV adoption, Intel stabilizes, and AI chipmakers shift to leading-edge N nodes to differentiate,” the analyst wrote. “China’s contribution is expected to normalize to the low-to-mid 20% of sales, reducing fears of a hard landing and severe export restrictions.” Scemama now sees ASML’s gross margins expanding in 2027, providing the stock with further leverage. This material improvement will be driven by a better mix. “Overall, we anticipate investor perception of ASML will shift from a ‘[wafer fab equipment] minus’ to a ‘[wafer fab equipment plus] story, supported by 500bps GM expansion by ’30E and driving a 5-year 18% EPS CAGR,” he added. Shares of ASML have surged 60% this year.
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