UBS raised its ASML price target to €1,400 from €1,030, citing 'too strong' momentum across logic, memory, and China. The bank boosted its 2026 and 2027 earnings estimates about 25% above consensus, reflecting stronger capital spending signals from leading customers and improved demand visibility ahead of ASML's Q4 results on January 28.

The upgrade hinges on TSMC's $52–56 billion 2026 capex guidance and an expected DRAM investment surge, which UBS says could drive a 40% jump in ASML's memory revenues next year. The bank now forecasts flat 2026 revenues in China, a reversal from prior decline projections, and anticipates ASML will guide for 10-20% annual growth.

While acknowledging doubts about AI investment sustainability, UBS analysts believe momentum remains too strong to derail near-term spending. They view High-NA EUV adoption within two years as critical for supporting ASML's valuation above historical averages. The main risks include weaker electronics demand from high memory prices and potential cuts to AI-related investments.