ASML Holdings' stock surged on evidence of multi-year order book for EUV lithography tools; Bernstein raised price target on AI-driven demand.

ASML Holding NV shares surged nearly 5.5% on Monday after Bernstein significantly raised its price target on the semiconductor equipment maker. The brokerage maintained its Outperform rating and increased its price target on the U.S.-listed shares to $2,623 from $1,971, implying 48% upside from Thursday's close. Bernstein cited an accelerating AI-driven investment cycle and rising lithography demand fueled by unprecedented expansion in advanced logic and DRAM capacity.

Supporting the optimistic outlook, SK Hynix announced plans to use proceeds from its planned U.S. IPO to expand chip manufacturing facilities in South Korea and purchase chipmaking equipment, including ASML's extreme ultraviolet (EUV) scanners, according to The Wall Street Journal.

Bernstein analyst David Dai said the firm had materially increased its revenue forecasts for ASML following the unprecedented AI-driven expansion in both advanced logic and dynamic random-access memory (DRAM) capacity. "We materially increase our ASML topline forecasts following the unprecedented AI-driven expansion in both advanced logic and [dynamic random-access memory] capacity," Dai wrote in a note to clients. "[High numerical aperture extreme ultraviolet] will likely be adopted first in DRAM than for logic due to lower cost of exposure for DRAM."

ASML is the major supplier of high numerical aperture extreme ultraviolet lithography, or HNA EUV, a manufacturing technology used to create memory solutions such as DRAM and high-bandwidth memory that power AI models. These HNA EUV systems etch patterns onto silicon wafers, creating the foundation for microchips, a critical component of artificial intelligence. Bernstein expects the company's lithographic manufacturing technology to gain further traction across the AI industry, supporting strong returns in the near term.

Wall Street consensus aligns with Bernstein's bullish view. According to data from Koyfin, 38 of the 43 analysts covering ASML currently have a "Buy" or "Strong Buy" rating on the stock. ASML stock has surged nearly 140% over the past year and 75% year-to-date as artificial intelligence adoption has widened, increasing investor interest in the company's semiconductor manufacturing solutions.