ASML stock (AMS: ASML) surged past a historic $500 billion market capitalization milestone on Thursday as a wave of positive catalysts swept through semiconductor equipment stocks.
The Dutch chipmaking equipment maker climbed over 6% in Amsterdam trading, reaching an all-time high of 1,167 euros.
The stock’s explosive rally was triggered by TSMC’s blockbuster earnings and an aggressive capital spending plan that signals massive orders ahead for ASML’s lithography tools.
TSMC’s capex boom: Why it matters for ASML stock
Taiwan Semiconductor Manufacturing Company, which accounts for a significant portion of ASML’s order book, blindsided investors with a bold capital expenditure plan for 2026.
TSMC announced it will spend between $52 billion and $56 billion next year, a jump of up to 37% from the $40.9 billion deployed in 2025.
Wall Street consensus had expected something closer to $46-$50 billion.
The upside surprise matters because TSMC is essentially saying it expects sustained and vigorous demand for advanced chip-making capacity well into 2026 and beyond.
TSMC is ASML’s largest customer, and when the chip giant spends on new fabrication plants and upgrades existing ones, it buys ASML’s extreme ultraviolet (EUV) lithography tools.
The machines cost tens of millions of dollars and are essential for manufacturing the most advanced chips.
Of TSMC’s projected $52-$56 billion capex, around 70-80% will target leading-edge process technologies.
That translates into a windfall of orders for ASML over the next 12-24 months as TSMC expands capacity to serve booming demand for artificial intelligence chips from customers like Nvidia and Apple.
Analyst upgrades push valuation higher
Wall Street has caught on. On Wednesday, JPMorgan raised its ASML price target from $1,275 to $1,518, a 19% jump.
That same day, Bernstein upgraded ASML from “Market Perform” to “Outperform” and nearly doubled its target from $935 to €1,300 (roughly $1,528).
RBC Capital initiated coverage with an “Outperform” rating and a $1,550 target. Aletheia Capital went even more aggressive, upgrading from “Sell” to “Buy” and doubling its target to $1,500.
These aren’t minor adjustments; they are substantial re-ratings that reflect Wall Street’s growing conviction that ASML is entering a multi-year cycle of elevated equipment demand.
The risks are real. Semiconductor equipment spending is cyclical, and any slowdown in AI adoption or a pullback in customer capex could derail the momentum.
Additionally, ASML faces concentration risk as its largest customer dominates its order pipeline. Geopolitical tensions around Taiwan and China could also complicate the outlook.
In April, TSMC’s technology symposium could deliver another catalyst if the company accelerates its High-NA EUV adoption timeline.
TSMC’s splurge signals the semiconductor upcycle has legs. For ASML, that spells order growth and margin expansion well into 2026.
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