Key Points
UBS raised its price target on ASML stock by 43% this morning.
AI chips remain in deficit, and ASML builds the machines that can solve this problem.
- 10 stocks we like better than ASML ›
ASML Holding (NASDAQ: ASML) stock jumped 6.3% through 11:25 a.m. ET Wednesday after receiving a vote of support from UBS.
In a note covered on StreetInsider.com this morning, the Swiss megabanker raised its price target on ASML stock by nearly 19%, to EUR1,900 (that's about $2,210 -- about 43% more than ASML stock costs today).
Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue »
Image source: Getty Images.
Why UBS loves ASML
It's no mystery why UBS would be raising price targets on ASML today: The reason is rising demand for artificial intelligence chips.
UBS is convinced AI chip supplies are tightening amid rising demand, driving up prices and "driving a more prolonged investment cycle extending into 2028." As arguably the key provider of machines for manufacturing semiconductor chips, ASML should directly benefit from increased investment in these machines -- which is to say increased buying of the machines by manufacturers such as Intel (NASDAQ: INTC) and Taiwan Semiconductor Manufacturing Company (NYSE: TSM).
UBS argues that ASML can produce enough machines to grow semiconductor supplies by 50% next year, and that ASML itself should be able to grow sales strongly over the next 12 to 18 months.
In UBS's opinion, this makes ASML its "top sector pick" in semiconductors.
What it means for ASML stock
Which all sounds logical, but... ASML stock has roughly doubled in price over the past year. Is it still cheap enough to buy?
That's where I start to worry UBS is getting off track. Priced at more than 48 times trailing earnings, but with earnings growth forecast at only 23% over the next five years and real free cash flow lagging reported earnings a bit, ASML is not a cheap stock.
Although a great company, growing strongly, and integral to the semiconductor supply chain, I cannot recommend ASML stock at its current price.
Should you buy stock in ASML right now?
Before you buy stock in ASML, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and ASML wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $481,750!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,352,457!*
Now, it’s worth noting Stock Advisor’s total average return is 990% — a market-crushing outperformance compared to 206% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of May 20, 2026.
Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends ASML, Intel, and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
