Barclays upgrades ASML, sees surging demand as foundries compete
Barclays sees more gains ahead for ASML after a big earnings beat Wednesday coupled with better than expected guidance. The bank upgraded the Dutch semiconductor equipment overweight from equal weight Thursday. Shares rose more than 3.5% in premarket trading following the rating change. Barclays analyst Simon Coles said demand for ASML’s product — extreme ultraviolet lithography machines critical for the development of advanced semiconductors — to support data centers is materializing more quickly than they had expected. As foundries like Taiwan Semiconductor and Intel increase competition, that will only further accelerate ASML’s demand, he said. ASML YTD mountain ASML year-to-date chart “We also see a variety of other upside scenarios that could help the investment case further… in particular foundry competition which we don’t think is fully reflected yet,” Coles wrote. “With two foundries playing catch up to the leader, we see upside risk from this competition driving increasing investment which should benefit ASML/semicap into 2027.” China has been a risk for the company, Coles said, with export control risks adding “uncertainty” to the future of that market for ASML. However, he argued that ASML’s guidance for China sales to fall 10% year over year is likely an overestimation. He noted that recent Chinese import data shows demand in the country is strong. And while ASML’s 2026 sales guidance was ahead of estimates, Coles wrote it’s still “conservative,” creating potential for more beats this year. “Given upside to estimates, scope for beats and raise and insatiable AI demand we upgrade to OW believing there is more outperformance ahead,” he wrote. ASML is up 33% in 2026, and nearly 100% in the past year.
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