ASML Holding (ASML 1.06%) is an artificial intelligence (AI) bellwether, as its extreme ultraviolet lithography machines are the only ones that enable foundries, memory manufacturers, and integrated device manufacturers to print advanced chips for several AI applications.
The chips manufactured using ASML’s machines are deployed in smartphones, personal computers, and data centers, among other applications. So the company’s latest results bode well for AI stocks, as they clearly show that demand for AI infrastructure is so strong that companies have been investing aggressively to build more capacity.
So don’t be surprised to see AI stocks such as Micron Technology (MU +8.50%) head higher following ASML’s latest report. Let’s see why that may be the case.
Image source: Micron Technology
ASML expects the memory shortage to continue
ASML has boosted its 2026 revenue guidance. It now expects its revenue to increase by 16% year over year to 38 billion euros at the midpoint of its guidance range, up from its prior expectation of 11.6% growth. ASML management attributes the improved guidance to the growing capital expenses of its customers.
Today’s Change
(-1.06%) $-15.44
Current Price
$1443.53
Key Data Points
Market Cap
$562B
Day’s Range
$1378.85 – $1477.87
52wk Range
$651.46 – $1547.22
Volume
105K
Avg Vol
1.8M
Gross Margin
52.60%
Dividend Yield
0.53%
Importantly, ASML points out that its customers are witnessing healthy demand from their own customers. As a result, ASML anticipates that its customers will continue to boost their production capacities in 2026 and 2027. There is a simple reason ASML’s customers, which include foundries such as Taiwan Semiconductor Manufacturing and Samsung and memory manufacturers such as Micron, are boosting capital investments: surging demand.
Micron will continue benefiting from a favorable pricing environment
ASML management remarked on the latest earnings call that memory supply is unlikely to meet demand in the foreseeable future. This is great news for Micron Technology investors, who have seen a remarkable 60% increase in the company’s stock so far this year.
Micron stock has benefited from the shortage of memory chips, which has led to a stunning jump in the prices of both dynamic random-access memory (DRAM) and NAND flash storage chips. Analysts are expecting the company’s non-GAAP earnings to jump almost sevenfold in the current fiscal year. Even better, Micron’s earnings could increase by an impressive 70% in the next fiscal year.
However, Micron could exceed expectations as DRAM prices are anticipated to jump by 125% this year, while NAND flash prices are expected to jump by 234%, according to Gartner. With Micron trading at just 22 times earnings, it is time to buy this stock hand over fist, as ASML’s comments indicate that the favorable pricing environment it enjoys is here to stay.
Analysts are anticipating Micron stock to jump another 21% in the coming year, based on its 12-month median price target of $550. Also, 92% of the 48 analysts covering Micron rate it as a buy. All this suggests that Micron is a no-brainer buy right now, especially given that it can crush the median price target once the market rewards it with a premium valuation for its eye-popping earnings growth.
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