Morgan Stanley Predicts ASML Earnings to Double by 2027
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jan 24 2026
0mins
Source: NASDAQ.COM
- Earnings Growth Outlook: Morgan Stanley forecasts ASML's earnings per share to reach €46 by 2027, doubling from the estimated €24.78 in 2025, indicating strong profit growth potential that could drive the stock price up by 81% to $2,407.
- Surge in Capital Expenditure: Taiwan Semiconductor Manufacturing Company plans to increase its capital spending by 32% to $54 billion in 2026, with 70%-80% allocated to advanced process node chip production, directly boosting demand for ASML's extreme ultraviolet (EUV) equipment and solidifying its market position.
- Strong Market Demand: With the rise of artificial intelligence applications, the demand for ASML's equipment continues to grow, and Morgan Stanley notes that the ramp-up in semiconductor manufacturing capacity could lead to a 70% increase in ASML's stock price, reflecting the industry's deepening reliance on its technology.
- Memory Chip Shortage: Micron Technology plans to invest $20 billion in capital expenditures this fiscal year, a 45% increase from last year, which will further drive demand for ASML's equipment as high-bandwidth memory (HBM) becomes increasingly essential in AI data center accelerators.
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Analyst Views on ASML
Wall Street analysts forecast ASML stock price to fall
12 Analyst Rating
12 Buy
0 Hold
0 Sell
Strong Buy
Current: 1762.770
Low
1385
Averages
1583
High
1911
Current: 1762.770
Low
1385
Averages
1583
High
1911
About ASML
ASML Holding N.V. is a holding company based in the Netherlands. The Company operates through its subsidiaries in the Netherlands, the United States, Italy, France, Germany, the United Kingdom, Ireland, Belgium, South Korea, Taiwan, Singapore, China, Hong Kong, Japan, Malaysia and Israel. The Company operates through one business segment which is engage in development, production, marketing, sales, upgrading and servicing of advanced semiconductor equipment systems, consisting of lithography, metrology and inspection systems. The Company offers TWINSCAN systems, equipped with lithography system with a mercury lamp as light source (i-line), Krypton Fluoride (KrF) and Argon Fluoride (ArF) light sources for processing wafers for manufacturing environments for which imaging at a small resolution is required. TWINSCAN systems also include immersion lithography systems (TWINSCAN immersion systems).
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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See More
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See More
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- Manufacturing and Testing Bottleneck: The AI chip supply chain is facing critical bottlenecks at the manufacturing and testing layers, with optical interconnect scaling and silicon photonics capacity emerging as key constraints on AI data center buildout, impacting overall industry growth.
- Revenue Outlook Upgrade: Credo Technology has raised its fiscal 2027 revenue growth outlook to over 80%, expecting more than $600 million from its optical portfolio, reflecting a strong response to the demand for optical data centers.
- Increased Partnerships and Orders: Advantest's partnership with OpenLight aims to develop silicon photonics test solutions to support scalable manufacturing for AI and HPC data centers, indicating that the photonics manufacturing ecosystem is actively expanding.
- Market Tension: Despite rising revenue targets, companies like MaxLinear and Fabrinet have cited supply tightness and component availability as near-term execution risks, highlighting the contradiction between demand for optical data centers and supply chain capabilities.
See More
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- Asian Market Impact: Japan's Nikkei Index declined by over 3%, and South Korea's Kospi fell by more than 10%, with foreign investors offloading over $2.5 billion in Kospi shares, exacerbating negative sentiment and contributing to a global market downturn.
- Divergent Manufacturing Data: The U.S. June manufacturing PMI unexpectedly rose to 55.7, surpassing expectations, indicating economic resilience; however, the Richmond Fed manufacturing survey fell to 4, suggesting challenges in the economic recovery that may influence Fed policy.
- Bond Market Reaction: In response to the sharp equity selloff, the 10-year T-note yield dropped to 4.485%, indicating increased demand for safe-haven assets, although upcoming Treasury auctions may exert upward pressure on yields.
See More
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- Positive Market Outlook: Wells Fargo anticipates continued strong performance for semiconductor equipment manufacturers in Q2 2026, particularly for ASML, raising its 2027 Wafer Fab Equipment market estimate from $180 billion to $190 billion, reflecting confidence in industry recovery.
- Accelerating Demand: Analysts noted that despite recent stock fluctuations, investors remain optimistic about semiconductor capital equipment stocks, with ASML's year-to-date performance (+80%) seen as a potential catch-up trade compared to the peer average (+127%).
- Forecast Updates: Wells Fargo also increased its 2028 Wafer Fab Equipment market estimate from $191 billion to $216 billion, indicating strong expectations for advanced foundry and DRAM demand, with Lam Research and KLA likely to raise their 2026 outlook as well.
- Confidence in Technical Capacity: Analysts emphasized that ASML is expected to reiterate its low-NA tool capacity for 2027, projecting support for at least 60 tools in 2026 and at least 80 in 2027, showcasing the company's robust capability to meet market demand.
See More
ASML Investment Returns 230%, Future Growth Expected
- Significant Investment Returns: Since investing in ASML in early 2021, the investor has realized an unrealized gain of approximately 230%, with the position accounting for 5% of their portfolio, reflecting the company's robust performance in the semiconductor sector.
- Market Dominance: ASML is the world's only producer of extreme ultraviolet (EUV) lithography machines, with prices ranging from $200 million to $400 million, and its strong pricing power and market moat have driven gross margins from 48.6% in 2020 to 52.8% by 2025.
- Sustained Growth Drivers: Despite macro challenges such as the pandemic, supply chain disruptions, and inflation, ASML's revenue and EPS have grown at CAGRs of 18% and 24% from 2020 to 2025, underscoring its critical role in the global semiconductor market.
- Optimistic Future Outlook: Analysts expect ASML's revenue and EPS to grow at CAGRs of 18% and 27% from 2025 to 2028, particularly driven by increasing demand for its high-NA EUV systems in the booming AI market.
See More
