Morgan Stanley Bullish on Lithography Leader ASML: Up 70% in Bull Case

 

Driven by TSMC’s positive earnings this week, global lithography leader ASML hit a new all-time high and became the third European company to exceed $500 billion market cap in history.

 

Compared to luxury giant LVMH and weight-loss drug firm Novo Nordisk, ASML — in the “AI investment frenzy” — seems to have room to challenge Europe’s limits.

 

Morgan Stanley’s semiconductor team said in its latest report that in the most optimistic scenario, ASML could rise another 70% as chipmakers ramp up spending to meet surging AI demand.

 

(Source: TradingView)

 

Including senior semiconductor analyst Lee Simpson, the Morgan Stanley team believes that with ASML’s largest customer TSMC showing no slowdown in AI-related spending, combined with upward revisions to 2027 foundry and memory capex expectations, their view is becoming increasingly optimistic.

 

The report notes that explosive profit growth, driven by strong demand for ASML’s dedicated chip manufacturing equipment, forms the core bullish case for the stock.

 

Morgan Stanley forecasts ASML’s EPS to rise to €46 in FY2027 — not only the strongest YoY profit growth in company history (57%) but nearly double FY2025. This is mainly due to “sharp growth” in advanced process equipment sales. Analysts expect ASML’s EUV lithography machine shipments to reach an astonishing 80 units in 2027, driven by demand from TSMC, Intel, Samsung, and others.

 

Simpson emphasized that order activity over the next 2–3 quarters will validate this strong momentum.

 

Morgan Stanley also noted that rising memory chip prices will prompt memory manufacturers to expand capacity construction, driving related equipment demand.

 

In Morgan Stanley’s “bull case,” with earnings exceeding expectations and tech valuations continuing upward, ASML’s stock could reach €2,000. In the base case, it would hit a new high of €1,400.