This article first appeared on GuruFocus.
ASML Holding (NASDAQ:ASML) shares surged about 4% in early Friday trading after Aletheia Capital upgraded the chip-equipment maker’s European-listed stock to Buy from Sell, pointing to improving demand trends.
The brokerage cited expanding semiconductor factories, capacity ramps and rising orders for extreme ultraviolet lithography tools, a technology used to produce advanced chips for artificial intelligence and high-performance computing.
Aletheia also raised its price target sharply, reflecting expectations for stronger earnings momentum over the next two years as customers accelerate investment plans.
Analysts said demand from leading chipmakers remains a key driver. Taiwan Semiconductor Manufacturing Company (TSM), one of ASML’s largest customers, is expected to install a higher number of EUV systems as it expands advanced manufacturing capacity.
The brokerage lifted its forecasts for fiscal years 2026 and 2027, expecting faster growth in ASML’s EUV revenue, supported by higher shipment volumes and a richer mix of tools.
Broader analyst sentiment toward ASML has also improved, with several firms raising earnings estimates in recent weeks as visibility into AI-related chip spending improves.