Morgan Stanley Elevates ASML to Top Semiconductor Pick Amid DRAM Technology Shifts

ASML shares gained 2.7% in Amsterdam trading after Morgan Stanley designated the Dutch lithography specialist as its premier European semiconductor stock. The bank lifted its price target to €1,000, citing accelerating demand from memory manufacturers transitioning to advanced 1c node production.

The technology shift requires 5-6 extreme ultraviolet (EUV) layers per wafer, significantly increasing ASML's equipment utilization. Despite anticipating a 15-20% demand contraction in China, analysts project robust 52.3% gross margins through 2026 as DRAM manufacturers accelerate capex cycles.

ASML's $389 billion market valuation reflects its monopoly in EUV lithography systems. The stock's New York listing climbed 1.5% to $1,003, outperforming broader semiconductor equipment peers during Wednesday's session.