Shares in ASML, the Dutch semiconductor equipment giant, jumped more than 4% on Wednesday after Bank of America reaffirmed its Buy rating on the stock, citing a strong guidance beat. The upgrade came after the company reported better-than-expected quarterly orders and raised its full-year revenue forecast, driven by sustained demand for its cutting-edge extreme ultraviolet (EUV) lithography systems.
The move rippled across European technology markets, with the STOXX Europe 600 Technology index climbing 1.8%. In London, shares in Arm Holdings, the UK-headquartered chip designer, rose 2.3%, while specialist semiconductor wafer maker IQE added 3.1%. The FTSE 100 edged up 0.4% to 8,312 points, supported by gains in tech-exposed stocks.
Analysts at Bank of America noted that ASML's order backlog remains at record levels, underpinned by investments from major chipmakers such as TSMC, Samsung, and Intel. "ASML continues to benefit from the structural shift toward AI and advanced computing, which requires ever more sophisticated lithography tools," they wrote in a note to clients. The bank expects earnings per share to grow by around 20% in the next financial year.
For UK investors, the development is significant because many pension and investment funds hold ASML as part of their global equity allocations. The company is a bellwether for the semiconductor cycle, and its robust outlook suggests that demand for chips used in AI data centres, smartphones, and automotive electronics remains strong despite broader economic uncertainty.
However, some analysts caution that geopolitical risks — particularly US-China export controls — could still weigh on the sector. ASML is restricted from selling its most advanced EUV machines to Chinese customers, a constraint that has limited its revenue from the region. Nevertheless, the company has offset this with stronger demand from other markets, including the US and Europe.