BofA Securities analyst Didier Scemama reiterated a Buy rating on ASML Holding N.V. (NASDAQ:ASML) with a price target of 1,302 euros ($1,406), up from 1,156 euros ($1,213).

Scemama raised his revenue and EPS estimates for calendar years 2025 and 2026 by 6%- 9%, reflecting higher confidence in higher demand for EUV tools and higher gross margin (54.9% vs. 54.7% prior).

The analyst's new calendar year 2025 and 2026 revenue estimates are 10%- 7% above consensus, while his EPS estimates are 15%- 9% above consensus.

ASML remains Scemama's top pick in EU Semicaps. The price target change reflects the multiple expansion of the sector and the value of AI scarcity in Europe.

ASML remains irreplicable in the buildout of AI infrastructure, with all AI processors and DRAM companies using EUV technology to manufacture their chips, per the analyst. While some concerns remain about foundry orders through the end of this year, he noted that the pace of investment from all leading hyperscalers and enterprise customers in AI infrastructure leaves very doubt that significant capacity needs to be added at the leading edge.

As per Lam Research Corp (NASDAQ:LRCX), the DRAM content in an AI server is 8x that of a traditional enterprise server, while it is 4x higher for the logic content and 3x to 4x higher for NAND. Scemama raised his calendar year 2024 booking forecast from €10.3 billion to €10.7 billion, with EUV increasing from €8.1 billion to €9.3 billion. This translates into 80 EUV unit shipments in the calendar year 2025.

Scemama estimated litho intensity in calendar years 2023 and 2024 at around 25%- 26%, above the historical norm of 22%. This reflects greater complexity at the leading edge, in part due to EUV.

Price Action: ASML shares traded lower by 2% at $1,031.53 at the last check Friday.