Morgan Stanley named ASML as one of its key investments and allowed the stock to rise by 70%

Investment bank Morgan Stanley expects that shares of Dutch semiconductor equipment manufacturer ASML Holding in the most favorable scenario can grow by more than 70%, Bloomberg writes. This may be facilitated by the increase in capital expenditures of chip manufacturers seeking to meet the growing demand for solutions in the field of artificial intelligence, the agency points out.

If ASML's earnings beat analysts' expectations and the valuations of technology companies in the market continue to grow, under the optimistic scenario of Morgan Stanley (MS), ASML shares could rise to €2000, Bloomberg writes. The base scenario of MS analysts for the company's securities assumes growth of their price up to €1400 - this is the second highest target estimation of ASML shares among Wall Street brokers, Bloomberg points out. It is 20% higher than current levels.

ASML, as the agency notes, is among key investment ideas of the bank. Morgan Stanley analysts note that they have become even more positive on ASML securities after the Netherlands-based company's largest customer, Taiwan Semiconductor Manufacturing Co (TSMC), showed in its latest report on Jan. 15 that the boom in AI investment is not slowing down. "The memory makers' capital expenditure growth in 2027, as well as stronger than expected demand from China, reinforce our confidence [in ASML's future]," Morgan Stanley analysts wrote.

ASML shares rose 1.3 percent to €1164 in Amsterdam on Friday, Jan. 16. This week, after the TSMC report, the company's market capitalization exceeded $500 billion, ASML became the third European company to reach this milestone, Bloomberg points out. The company's securities have already added 25% since the beginning of 2026.

Morgan Stanley believes that the key driver of future growth in ASML shares is the excess profits that the company can generate, given the high demand for ASML's specialized equipment for chip manufacturing. The bank's analysts expect the company's earnings in 2027 to be around €46 per share, which would be almost double the 2025 figure.

TSMC's stronger-than-expected outlook this week sparked a new wave of optimism about AI spending. In addition, the U.S. and Taiwan reached a long-discussed trade agreement on Jan. 15 that would require Taiwanese tech companies to invest $250 billion in the U.S. in exchange for lower duties.

Not only for the demand from TSMC, but also the rise in chip prices will lead to the expansion of production capacity at memory chip makers and will support demand for ASML equipment in the near future, according to Morgan Stanley. The bank's analysts also noted that ASML's sales to Chinese chip makers were higher than expected.

Of the 39 analysts covering ASML securities, 31 of them advise to buy them, while the other eight advise to hold.

This article was AI-translated and verified by a human editor