ASML (ASML) Stock: Why TD Cowen Sees This 7% Dip as a Prime Buying Opportunity

Key Takeaways

• ASML’s American depositary shares have declined 7% over the last 30 days amid a broader retreat from AI-linked semiconductor equities.
• TD Cowen’s Krish Sankar maintains a Buy recommendation with a €1,500 price objective (approximately $1,735).
• The company’s valuation multiple relative to semiconductor equipment competitors has contracted from 120% to roughly 20% since Q4 2022.
• Next-generation logic processors and DRAM memory chips are projected to demand increased EUV lithography layers.
• Nvidia CEO Jensen Huang recently projected $1 trillion in cumulative AI chip orders extending through 2027, reinforcing ASML’s growth trajectory.

ASML shares have retreated from their recent peak levels, creating what TD Cowen analyst Krish Sankar characterizes as a “very attractive” entry point for investors. His optimistic stance centers on compressed valuation metrics and robust long-term expansion potential linked to surging AI semiconductor demand.

ASML Holding N.V., ASML

The company’s U.S.-traded shares have fallen 7% during the past month. This decline occurred as market participants shifted capital away from AI-adjacent chip stocks, despite ASML posting record-breaking orders for its advanced lithography equipment.

ASML occupies a strategic position within the semiconductor manufacturing ecosystem. The Dutch firm maintains an effective monopoly on extreme ultraviolet (EUV) lithography technology, which remains essential for producing cutting-edge microchips. No competing vendor currently offers comparable systems.

Since late 2022, ASML’s valuation premium compared to semiconductor equipment manufacturers such as Applied Materials, Lam Research, and KLA Corp has narrowed dramatically from 120% to approximately 20%. Sankar attributes this compression to current chip production techniques that utilize fewer EUV processing steps.

However, Sankar contends this dynamic is poised to shift. Upcoming generations of both logic semiconductors and memory technology — particularly DRAM — will require additional EUV layers during fabrication. He emphasizes that the memory sector implications remain “underappreciated” among investors.

High-NA EUV Technology: Emerging Growth Catalyst

ASML’s latest High-NA EUV equipment remains in the initial stages of commercial deployment. The company reported revenue from only two High-NA units during Q4 2025, contrasted with 94 conventional lithography systems delivered during that same quarter.

TSMC has demonstrated reluctance in publicly embracing High-NA EUV adoption. The foundry giant has indicated it can maximize existing equipment capabilities. Nevertheless, Sankar expects enhanced system reliability will ultimately drive broader customer adoption.

TD Cowen’s financial models project 60 lithography system shipments in 2026, expanding to 68 units in 2027 as High-NA equipment volumes double and legacy platforms transition to upgraded variants.

Sankar rates ASML’s Amsterdam-traded shares as Buy with a €1,500 price objective, calculated at 48 times his 2027 earnings per share projection. ASML’s European-listed equity closed Thursday at €1,165. The U.S.-listed American depositary shares traded down 1.4% at $1,347.40 during premarket hours.

AI Capital Expenditure Underpins Long-Range Demand

The fundamental demand environment for ASML remains robust. Nvidia CEO Jensen Huang, presenting at GTC 2026 on March 16, elevated his AI chip order projection to at least $1 trillion through 2027. Broadcom CEO Hock Tan has independently forecasted $100 billion in AI semiconductor revenue for fiscal year 2027.

Amazon, Microsoft, Google, and Meta are anticipated to deploy nearly $600 billion in combined capital expenditures throughout 2026, with substantial portions allocated to AI infrastructure investments.

ASML also generates predictable recurring revenue. Maintenance and service contracts for its deployed equipment base represented approximately 25% of total 2025 revenue.

ASML currently commands a forward price-to-earnings ratio of 39.8, exceeding its 10-year median of 35.8. The company’s market capitalization stands at approximately $527 billion.