ASML (ASML) Downgraded to Neutral as Analyst Sees Peak AI Spending by 2026
ASML Holding N.V. (NASDAQ:ASML) is one of the AI Stocks In The Spotlight For Investors. On October 6, New Street downgraded the stock to “Neutral” from Buy with a EUR 790 price target. The firm highlighted concerns about ASML’s growth prospects beyond 2026.
The firm warns that growth prospects look weak despite robust near-term AI-driven demand. Robust AI spending outlook in recent months has led to a rally in semiconductor capital equipment stocks, with artificial intelligence capital expenditures likely to triple by 2030. This will require an estimated $130B cumulative wafer fab equipment spending.
However, the firm anticipates “peak acceleration this year and peak spending next year,” leading to a “weak” outlook beyond 2026. “Near-term uncertainty, limited upside to 2026 forecasts, and valuations 2-12 turns above historic averages” creates a “risky setup” for ASML stock.
Therefore, New Street has downgraded the stock and kept a cautious view on the sector.
ASML Holding N.V. (NASDAQ:ASML) develops and sells advanced semiconductor equipment, including lithography, metrology, and inspection systems for chip manufacturing.
While we acknowledge the potential of ASML as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on thebest short-term AI stock.
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Disclosure: None.
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