Analysts at BofA and Wells Fargo have raised their price targets for ASML shares. Should you buy them?
Analysts note that ASML has benefited from growing demand for memory chips
Memory manufacturers have begun purchasing more of ASML's next-generation equipment for chip production / Photo: Lea Rae / Shutterstock.com
Analysts at Bank of America and Wells Fargo have raised their price targets for shares of ASML, a manufacturer of semiconductor production equipment. They note growing demand for the new generation of machines used to manufacture memory chips, which have become extremely sought-after due to the artificial intelligence boom. During Monday’s trading session, the company’s shares initially hit a new all-time high, but then fell by about 2%.
What Bank of America Is Saying
BofA analyst Didier Schemama raised his price target for ASML shares from $1,900 to $2,345, while maintaining his “Buy” rating, according to CNBC. The new target is nearly 22% higher than the closing price on Thursday, June 18 (U.S. markets were closed on June 19). According to Schemama, ASML shares are likely to continue outperforming the market as the semiconductor equipment manufacturer receives an increasing number of orders; this is driven by several factors, including growing demand for more efficient solutions for memory chip production.
“ASML has succeeded in bringing next-generation extreme ultraviolet (EUV) lithography for chip manufacturing to an industrial scale. In our view, this will lay the foundation for many breakthrough technologies this decade,” CNBC quotes a BofA note published on Friday as saying. “Our ‘buy’ recommendation is based on expectations of higher utilization of lithography in DRAM production, as well as on the potential for ASML to exceed its 2030 targets thanks to the development of artificial intelligence and stronger industry demand.”
The bank expects ASML to report a full order backlog through 2027 in its next quarterly report. The company is scheduled to release its second-quarter results on July 15.
What Wells Fargo Has to Say
On June 22, Wells Fargo analyst Joe Quatrocchi raised his price target for ASML shares from $1,750 to $2,200, maintaining an “Overweight” rating—which is equivalent to a buy recommendation— according to StockTwits. This is 14% higher than the closing price on June 18.
According to the analyst, semiconductor equipment manufacturers are set for another strong quarter, which confirms the steady demand for products from leading suppliers of chip-making equipment.
What Other Analysts Recommend
On June 16, JPMorgan analyst Sandip Deshpande raised his price target for ASML shares from $1,275 to $1,518, while maintaining his “Overweight” rating, according to GuruFocus. The new target implies a 21% decline in the stock price.
Since the start of the year, ASML’s stock has risen 77%. Most analysts covering the company recommend buying the stock: it has 35 “Buy” and “Overweight” ratings, according to MarketWatch. Another five recommend holding the stock, while three suggest selling. Unlike the recent ratings from BofA and Wells Fargo, the Wall Street consensus price indicates that the market does not expect ASML’s stock to rise. The average price is $1,595.9, which is 17% below the closing price on Thursday, June 18.
This article was AI-translated and verified by a human editor
