Investment firm Bernstein has issued significant upgrades for semiconductor equipment leader ASML and memory chipmaker Micron Technology, citing a powerful and sustained upcycle in the memory market fueled by unprecedented demand from artificial intelligence infrastructure. The firm raised its price target for ASML from €800 to €1,300, upgrading the stock from Market Perform to Outperform, while also lifting Micron's target from $270 to $330.
The core driver of these optimistic forecasts is a severe and persistent memory chip shortage. Samsung's co-CEO TM Roh described the situation as "unprecedented," a sentiment echoed across the industry. This shortage is being exacerbated by chipmakers diverting manufacturing capacity to produce High-Bandwidth Memory (HBM) for AI servers, squeezing supply for other sectors like smartphones and USB drives. Bernstein analyst David Dai points to an emerging DRAM upcycle as a key catalyst, with the top three DRAM manufacturers planning to add up to 250,000 wafers per month in new capacity during 2026.
For ASML, the upgrade reflects expectations of stronger memory investment and advanced logic demand. A critical technological shift is providing a tailwind: the migration to the 1c DRAM node features a lithography intensity of 28%, higher than the 20-24% of previous nodes, which directly increases demand for ASML's advanced extreme ultraviolet (EUV) lithography equipment. Concurrently, foundry leader TSMC is expanding its 3nm capacity to 180-200,000 wafers per month to meet AI chip demand, a process node that also carries the highest lithography intensity.
Bernstein projects ASML's earnings per share to grow at an 18% compound annual rate from 2025 to 2027, above the consensus estimate of 15%, describing 2026 and 2027 as "big years for EUV and for ASML." The stock climbed 3.7% in Amsterdam trading following the announcement.
For Micron, the price target increase follows a monumental 262% return in 2025. The stock currently trades near $315, close to its record high. Bernstein and other analysts cite durable pricing power as Micron sells a critical bottleneck in the AI stack—memory. CEO Sanjay Mehrotra expects memory markets to remain tight past 2026, with analysts from firms like J.P. Morgan predicting the current "supercycle" could last into 2027. Other firms have set targets for Micron ranging from $300 to $500, with Rosenblatt holding the most bullish view at $500.
The rally is sector-wide, with shares of SK Hynix and Samsung also surging. The combination of AI-driven demand and structural supply constraints is creating a rare and powerful setup that Bernstein believes will benefit key equipment and memory players for years to come.
