ASML Holding NV has achieved a historic milestone, reaching a market capitalization of $691.8 billion, the highest ever for a European company. The Dutch semiconductor equipment maker's U.S.-listed shares surged 7.1% to $1,758.53 on Monday, following analyst upgrades that boosted confidence in its ability to meet surging demand for its extreme ultraviolet (EUV) lithography machines.
The rally comes as investors increasingly value companies that control critical bottlenecks in the AI chip supply chain. ASML is the sole producer of EUV machines, essential for manufacturing advanced logic chips at TSMC, Samsung, and Intel. This monopoly has made it a key beneficiary of the AI boom, as chipmakers race to expand capacity.
JPMorgan raised its price target on ASML to €1,900 from €1,515, and Morgan Stanley increased its target to €1,660 from €1,400, both maintaining overweight ratings. JPMorgan analyst Sandeep Deshpande noted that ASML could ship over 110 low-NA EUV machines without additional factory space, exceeding the 90-unit limit some investors had anticipated. Morgan Stanley highlighted ASML's planned expansion at the Brainport Industries Campus in Eindhoven, with construction starting in the third quarter of 2026.
ASML itself raised its 2026 revenue forecast in April to a range of €36 billion to €40 billion, up from the previous €34 billion to €39 billion. CEO Christophe Fouquet stated, "Demand for chips is outpacing supply," and noted that customers are accelerating their capacity expansion plans. CFO Roger Dassen confirmed the company expects to ship 60 low-NA EUV tools this year and has capacity for 80 by 2027.
In contrast, Broadcom Inc. experienced a sharp decline, with shares dropping over 14% last Thursday, erasing more than $315 billion in market value. The selloff came after the company reported Q2 revenue of $22.19 billion, slightly below expectations, and maintained its $100 billion AI revenue outlook for 2027. Although Broadcom's AI chip sales forecast for the current quarter remained at $16 billion—more than triple last year's figure—investors were disappointed by the lack of guidance upgrades.
Matt Britzman, senior equity analyst at Hargreaves Lansdown, described the market reaction as "a classic case of very high expectations meeting a market that wanted perfection." Bernstein analyst Stacy Rasgon suggested that Broadcom shares could stall for the next few quarters before "the story gets interesting again" in 2027. The divergence between ASML's surge and Broadcom's slump underscores the market's focus on companies with direct control over AI chip supply rather than those reliant on limited access.
Risk factors remain for ASML. CFO Roger Dassen noted that China is expected to account for about 20% of 2026 sales, but tighter export controls could push revenue to the lower end of the company's range. Morgan Stanley warned that the new Eindhoven campus must be just the start, calling for further expansion phases. Additionally, competitors like Canon, Nikon, and emerging players are working to challenge ASML's dominance in lithography equipment.
Despite these risks, ASML's record valuation highlights the market's willingness to pay a premium for the critical infrastructure underpinning the AI revolution. As chipmakers ramp up production, the demand for EUV machines is expected to remain robust, reinforcing ASML's position as a key enabler of advanced semiconductor manufacturing.
