Goldman Sachs Reiterates Buy on ASML: Smooth Capacity Ramp-Up, AI and CPUs as Core Growth Drivers

Overview

This note follows Goldman Sachs’ visit to ASML’s headquarters in the Netherlands and meetings with CEO Christophe Fouquet and Head of Investor Relations Sam Van Der Zalm. The core view is a reiterated 'Buy' rating on ASML with a maintained 12-month target price of €1,600. Key supporting factors include smooth progress in capacity expansion, significant additional demand potential driven by AI, an improved structure in the logic/foundry customer base with CPUs becoming a major growth driver, higher-than-expected receptiveness to High NA technology among memory customers, and resilient demand from the China market.

Core views

Capacity Expansion and AI Demand Reinforcement: ASML management indicated that the capacity ramp-up for 2026–2027 is progressing smoothly, supported by strong execution across the supply chain (including optical components) and shortened cycle times. The company is confident in delivering more than 60 EUV systems in 2026 and exceeding 80 in 2027. This current ramp-up is notably smoother than previous cycles due to optimized lead times and well-coordinated planning frameworks. Importantly, large-scale AI infrastructure projects could trigger further demand surges, with memory customers already accelerating fab construction timelines due to highly attractive incremental ROIC. Customer Base Optimization and the Rise of CPUs: In the logic/foundry segment, the customer landscape continues to improve structurally. For example, Samsung Foundry stands to benefit from logic-memory integration. From a demand perspective, CPUs are emerging as a critical AI tailwind—potentially even surpassing GPUs in near-term support—as they play an increasingly vital role in handling complex AI workloads. This diversification across customers and compute architectures provides ASML with a more balanced and sustainable growth backdrop. Significantly Improved Demand Visibility: Both logic and memory customers now exhibit substantially improved demand visibility, with greater willingness to provide long-term commitments. Notably, customers are placing orders with longer lead times and demonstrating stronger prepayment intent. In Goldman Sachs’ view, this not only enhances visibility into next year’s demand but extends further out, thereby reducing risks around the production expansion trajectory and supporting a more constructive outlook for 2027/28. Early Adoption of High NA in Memory: ASML noted that memory customers face relatively lower barriers to adopting High NA technology, as they can replace selected existing masks without additional stitching once High NA tools mature. Consequently, High NA adoption may occur earlier in memory applications than in logic. Additionally, sentiment around increasing EUV layers in DRAM is turning increasingly positive, with EUV layer counts in memory applications potentially reaching double digits by 2030 (around 5 layers in 2025). Resilience in China and DUV Strength: ASML continues to view China as a strong end market, with demand remaining robust even after a period of high activity. Management expects no significant additional near-term impact from export controls, as the 2026 guidance already incorporates these constraints. Furthermore, China’s lack of EUV capability drives reliance on alternative scaling methods (e.g., stacking), resulting in higher lithography intensity—particularly for DUV systems. Goldman Sachs sees this as positive for gross margin progression and confirms sustained demand for ASML’s tools due to more tool-intensive manufacturing approaches.

Analysis framework

Goldman Sachs gathered first-hand management insights through on-site research (headquarters visit) and combined them with top-down industry trend analysis (AI compute boom, shifting CPU/GPU demand dynamics) and bottom-up observations of customer behavior (increased prepayment willingness, extended lead times) to validate ASML’s growth thesis. The analysis focused on differentiating technology adoption pathways between application segments (logic vs. memory) and assessing the structural impact of geopolitical factors (China’s unique market dynamics) on DUV/EUV demand composition.

Methodology notes

• Industry/Sector Analysis FrameworkSupply-demand framework

  Supply-Demand Framework

  The report assesses industry momentum by analyzing the alignment between ASML’s supply capacity (EUV shipments, ramp speed) and downstream demand (AI infrastructure, memory capex). The smooth supply-side ramp-up combined with AI-driven demand surges underpins the bullish view.

• Industry/Sector Analysis FrameworkPenetration S-curve

  New Technology Penetration Analysis

  The report examines the adoption trajectory of High NA EUV in memory applications, noting lower adoption barriers compared to logic chips, suggesting it may be entering an early phase of rapid penetration—a key indicator for future growth.

• Valuation MethodologyPE/PEG valuation

  Forward P/E Valuation

  Goldman Sachs applies a 37x P/E multiple to CY27 EPS to derive the target price. This is a typical valuation approach for growth stocks, reflecting market pricing of forward-looking earnings power.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• ASML Holding (ASML.AS)

  Direct beneficiary; sole global EUV supplier and core provider of AI infrastructure equipment

  Strengths

  Smooth capacity ramp-up, High NA technology leadership, strong customer prepayment willingness, resilient DUV demand in China

  Risks

  EUV delays, cyclical semiconductor capex, adverse market share shifts

Key data

• 2026 EUV Shipment Expectation>60 unitsManagement expresses strong confidence; ramp-up on track
• 2027 EUV Shipment Trajectory>80 unitsSmoother than historical cycles
• 12-Month Target Price€1,600Based on 37x CY27 P/E
• Current Share Price€1,376.40As of May 27, 2026 close
• Implied Upside16.2%Based on target vs. current price

Impact & implications

The report argues that ASML’s demand base is becoming more balanced and durable, no longer reliant on a single customer or technology node. The enhanced role of CPUs in AI workloads and the potential early adoption of High NA in memory create new growth engines. Meanwhile, China’s unique situation—relying on DUV stacking due to EUV restrictions—actually supports strong near-term DUV demand and healthy margins. Together, these factors reduce production expansion risk and make ASML’s 2027–2028 outlook more constructive.

Risks

• EUV technology or delivery delays
• Cyclical fluctuations in semiconductor capital expenditure (Capex)
• Adverse market share shifts

What to watch

• Whether actual EUV shipments in 2026/27 meet the 60/80-unit targets
• Execution of AI-driven large-scale infrastructure projects
• Actual adoption pace of High NA technology by memory customers
• Sustainability of China market demand and marginal changes in export control policies