heavily on data centres, and whether ASML, its suppliers, and customers such as TSMC and Samsung can execute expansion plans. But after ASML shares spiked 60 per cent this year to push the firm close to a US$700 billion valuation, investors and analysts say the trillion-dollar scenario is plausible. “I think it has a really good chance of being the first company in Europe to hit the trillion mark,” said Carolyn Bell, lead portfolio manager for Stonehage Fleming’s Global Best Ideas, adding ASML accounted for about 8 per cent of the portfolio. “I just don’t know when.” The trillion-dollar question Analyst upgrades after the second quarter show it’s no pipe dream. Barclays, Susquehanna, and Bernstein now have 12-month price targets above US$2,600 per share – a 49 per cent rise from current levels and the rough threshold for a US$1 trillion market cap. ASML is the only seller of extreme ultraviolet (EUV) lithography tools required to print the minute circuitry of the most advanced logic and memory chips. Investors compare its business to selling picks and shovels during a gold rush. John Lamb of Capital Group, whose funds hold around 5 per cent of ASML shares worth US$35 billion, praised it as a long-term holding for its “unique assets and wide moats”. “The fundamentals for the industry as a whole appear stronger than ever, and ASML occupies a critical space,” he said. ASML has overtaken and is now streaking away from other leading European companies, such as Roche, LVMH, Novo Nordisk, AstraZeneca, and SAP. ASML could benefit from an “upgrade cycle” Shares trade at 38 times forecast earnings for 2027, according to LSEG data, well above multiples for top ASML customer TSMC, which manufactures the AI chips designed by Nvidia and used by OpenAI, Anthropic, and the hyperscaler firms. ASML investors and analysts said to justify the premium and grow into that valuation, several things need to go right, notably continuing hyperscaler demand. Trent Masters of Alphinity Investment Management, which has about 3 per cent of its portfolio in ASML, warned that “any cooling of this will flow through to ASML’s earnings”. He said other threats include ASML’s ability to manage its supply chain and geopolitical risks, though he is “on balance very positive” about the company’s outlook. US lawmakers have proposed the MATCH Act, a law that could curtail ASML’s sales and service of equipment in China – a market where ASML expects to account for 20 per cent of its sales in 2026. Analysts said there are also reasons ASML could keep growing even amid an AI slowdown. Kinngai Chan of Summit Insights Group said AI memory chip makers such as SK Hynix, Samsung, and Micron are shifting production away from processes that use ASML’s older DUV tools toward new and pricier EUV tools, a profitable “upgrade cycle”. ASML “can surely be” Europe’s first trillion-dollar firm, ING analyst Marc Hesselink said. And then there is the possibility that chip demand accelerates. The new Terafab plant planned by Elon Musk in Texas to supply SpaceX and Tesla represents a new source of revenue for ASML. Antoine Hucher of Aviva Investors said if the company executed its strategy well and AI demand held up, ASML would keep growing, though nothing was certain. “ASML could well become the first European company to reach a US$1 trillion market cap,” he said. “However, the volatility we have seen with AI stocks in the last few weeks suggests the journey to this achievement won’t be a straight line.” Reporting by Toby Sterling and Nathan Vifflin. Editing by Adam Jourdan and Daniel Wallis. All courtesy of Reuters.