ASML’s AI Partnership Ignites Stock Rally

The Dutch semiconductor equipment manufacturer ASML has captured market attention since September 2025 with a series of major announcements, triggering a powerful surge in its share price. While other technology stocks have shown weakness, ASML has rocketed to the top of the performance charts. This momentum is fueled by a multi-billion euro artificial intelligence partnership that has the potential to fundamentally reshape the company’s strategic direction.

Strategic Investment in French AI Firm

In a move that surprised industry observers, ASML announced on September 9, 2025, that it would lead a €1.3 billion funding round for the French AI company Mistral AI. This strategic investment secures ASML an approximate 11 percent ownership stake. The collaboration extends beyond a simple financial transaction; ASML’s Chief Financial Officer, Roger Dassen, will take a seat on Mistral AI’s strategic committee. The core objective is the deep integration of advanced AI models across ASML’s entire product portfolio, research initiatives, and development processes.

Market Experts Revise Outlooks Upward

The month of September 2025 proved to be a pivotal period for analyst sentiment toward ASML. A wave of positive revisions began on September 22 when Morgan Stanley upgraded the stock to “Overweight” and set a price target of €950. UBS followed suit, raising its target to €750 and labeling ASML a “Quality Compounder.” Analysts at Morgan Stanley highlighted “early indications” that earnings projections for the 2025-26 period are likely shifting to 2026-27, suggesting a more sustainable long-term growth trajectory. Their forecast for fiscal year 2027 anticipates earnings per share of around €33, which stands roughly 8 percent above the current market consensus.

Should investors sell immediately? Or is it worth buying ASML?

Solid Fundamentals and Next-Generation Technology

ASML’s dominant position in extreme ultraviolet (EUV) lithography systems remains unchallenged. The company is now paving the way for its next-generation technology, High-NA EUV, expected to launch between 2027 and 2028, which is projected to become a significant value driver. These future prospects are built upon a foundation of strong current performance. Second-quarter results showcased a net revenue of €7.7 billion and a net profit of €2.3 billion. Management’s guidance for 2025 points to 15 percent revenue growth, primarily driven by the company’s critical role as a supplier for the AI chip ecosystem.

Geopolitical Considerations

Despite ongoing geopolitical tensions, the Chinese market is expected to contribute approximately 25 percent to ASML’s total revenue in 2025. Market strategists generally believe that the risks associated with the company’s exposure to China are already reflected in its valuation, a factor that has contributed to the recent positive performance of its shares.