About ASML Holding NV ADR (ASML.US), there are two conflicting narratives: AI investment without catalyst versus High-NA bull market narrative! The market seems to believe the latter.

Dutch lithography machine giant ASML Holding NV ADR has invested 1.3 billion euros in a French artificial intelligence startup company Mistral AI, establishing a strategic partnership and becoming the largest shareholder of the AI startup. This news has attracted global investor attention, who believe that this move signifies the leader in lithography machines incorporating leading generative AI technology into their equipment and operational processes to accelerate lithography machine research and development and further strengthen the production efficiency and defect detection technology of new equipment. Shortly before this collaboration, ASML Holding NV ADR's delivery of High-NA to SK Hynix also sparked discussions, leading to a strong upward trend in ASML Holding NV ADR's stock price from the year's low point. However, upon hearing this news, Wall Street financial giant Morgan Stanley quickly poured cold water on ASML Holding NV ADR's investment and strategic collaboration, sending a bearish research report on the prospects of ASML Holding NV ADR's stock price, indicating that the latest collaboration and investment have almost no impact on the midterm profit expectations of ASML Holding NV ADR, and the lithography machine shipments are still expected to be weak in 2025-2026. The institution views the impact of this collaboration and investment on the long-term fundamentals of ASML Holding NV ADR as "neutral". Furthermore, Morgan Stanley's analyst team maintains a "hold" rating on ASML Holding NV ADR stock and keeps the target stock price for the next 12 months at 600 euros. In contrast, ASML Holding NV ADR's stock price has significantly increased in recent days, hovering around 685 euros per share in the European stock market. In the US stock market, ASML Holding NV ADR's ADR (ASML.US) has risen over 16% since August, with a cumulative increase of 10% in the past seven trading days, hovering around $805 per share. Internationally, investment institutions such as UBS Group AG are more optimistic about the future of ASML Holding NV ADR's stock price, highlighting the significant divergence in the market's view on ASML Holding NV ADR's future performance growth and valuation. UBS Group AG maintains a "buy" rating for ASML Holding NV ADR and has raised the target stock price for the next 12 months from 660 euros to 750 euros, emphasizing that the semiconductor equipment giant is strategically transitioning to higher-priced next-generation EUV lithography machine models and earning more profit from large-scale upgrades of lithography equipment in existing installations. Market seems to be more inclined to believe the bullish logic of UBS Group AG and other bullish views. Morgan Stanley: Neutral Impact at Present, Betting on Functional Integration and Pricing Power for the Long Term, Strategic AI Investment Aligned with Long-term Goals ASML Holding NV ADR announced an investment of approximately 1.3 billion euros in Mistral AI in the C round, becoming the lead investor in this round and acquiring an 11% stake in the company. More importantly, the companies discussed future collaborations with Mistral to develop new AI-enabled solutions for ASML Holding NV ADR's vast customer base and use Mistral's AI models to expedite the development of lithography products. ASML Holding NV ADR obtained a seat on Mistral's board, with Chief Financial Officer Roger Dassen taking on the role. Morgan Stanley commented that in the short term, this move will primarily be seen as "neutral" or more as ASML Holding NV ADR supporting the European AI ecosystem. "We expect the market overall not to make significant adjustments to mid-term profit expectations. However, this is in line with ASML Holding NV ADRs existing AI research and strategy, and may significantly enhance pricing power in the long term, even potentially revolutionizing the lithography machine development process," wrote Morgan Stanley in the report. Morgan Stanley stated that overall, ASML Holding NV ADR's "investment in AI does not change the flat performance expectation": ASML Holding NV ADR's investment in Mistral has a neutral impact at present, with a long-term bet on functional integration and pricing power. Morgan Stanley also stressed that ASML Holding NV ADR's performance expectations for 2025-2026 remain weak and there have been no significant catalysts recently. Morgan Stanley quoted expectations disclosed by ASML Holding NV ADR management at the last earnings conference that macroeconomic changes and political uncertainties related to the GEO Group Inc are bringing increasing uncertainties to a larger scale; therefore, while we are still preparing for growth in 2026, we cannot confirm at this stage whether this growth will occur. It is understood that the unclear growth prospects for 2026 have been an important logic for ASML Holding NV ADR's stock price significantly underperforming European and US market indices for most of this year. Market recently put forward a viewpoint that the emergence of "Agentic AI" will transform semiconductor equipment companies not only into enablers but also into adopters of cutting-edge AI. "One example we have cited is: ASML Holding NV ADR using AI to enhance throughput and accuracy of chip patterning; this has already been demonstrated in its work with NVIDIA Corporation, adjusting certain elements of ASML Holding NV ADR's overall lithography holistically. In this regard, ASML Holding NV ADR appears to be further advancing. Through this strategic collaboration, we believe ASML Holding NV ADR can create new chip manufacturing tools capable of better meeting customer demands in system design (e.g., 3D ICs)," wrote the Morgan Stanley analysis team. Morgan Stanley further added that with rising design complexity and increasing time-to-market pressures, semiconductor equipment companies like Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR are facing demands for innovative systems. "The addition of generative AI features can bring higher value to customers and may lead to higher ASPs (average selling prices) when ASML Holding NV ADR delivers more advanced computational lithography capabilities to customers such as Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR," said Morgan Stanley. There is a divergence of opinions among investment institutions regarding ASML Holding NV ADR's prospects, with UBS Group AG setting a target price of 750 euros According to UBS Group AG, Wolfe Research, Bank of America Corp, and other investment institutions that are bullish on ASML Holding NV ADR's stock price prospects, leaders in chip manufacturing such as Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR, Samsung, and SK Hynix collectively transitioning to next-generation EUV lithography machines - High-NA EUV lithography machines, is expected to help ASML Holding NV ADR's long-term performance growth prospects become clearer and stronger. The rapid escalation of "High-NA from the laboratory to chip manufacturing deployment" can be seen as one of the key factors currently driving the bullish sentiment and reassessment of valuation for ASML Holding NV ADR. SK Hynix recently announced the completion of the industry's first "commercial" High-NA (EXE:5200B) field assembly at its Icheon M16 plant in Korea, further strengthening expectations for "High-NA transitioning from verification to terminal deployment". UBS Group AG's analyst team believes that concerns about the decline in lithography strength and uncertainty in the Chinese market are now well known in the market, allowing investors to shift their focus from relatively weak 2025-2026 performance prospects to positive expectations of a 20% compound annual growth rate in earnings per share from 2026 to 2030. UBS Group AG's latest growth forecast seems to be supported by ASML Holding NV ADR's strong financial fundamentals, with the semiconductor equipment giant seeing revenue growth of up to 26.4% in the past 12 months and maintaining a healthy gross margin of 52.5%. UBS Group AG points out that the market focus will shift to 2027, with a significant inflection point in performance expansion expected by 2027. UBS Group AG forecasts a target stock price of 750 euros, emphasizing that this will be largely driven by Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR's A14 (1.4nm-class) advanced process node production; combined with Samsung and Intel Corporation focusing on below 2nm processes, SK Hynix for accelerating the next generation of DRAM, driving the much more expensive High-NA demand compared to regular EUV lithography machines. UBS Group AG's latest predictions show, Based on a bottom-up analysis, the institution believes that there will be significant large-scale deployment in the next two years, with an expected shipment of 6 and 10 High-NA machines in 2027 and 2028 respectively, accounting for approximately 30% of ASML Holding NV ADR's overall revenue growth in these two years. Furthermore, UBS Group AG also states that several other potential catalysts within the next year could support ASML Holding NV ADR's accelerated expansion, including: clearer information on EUV exposure increments in major semiconductor industry events, comments on High-NA adoption and penetration rates during quarterly earnings calls, the launch of a brand-new, much higher-priced EUV-F model with a much higher average selling price in the second half of 2026, and announcements of new customers from Intel Corporation and Samsung. For Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR, as well as Intel Corporation and Samsung Electronics developing 2nm and below nodes manufacturing technology, ASML Holding NV ADR's high-NA EUV lithography machines are crucial. The high-NA EUV technology uses a 0.55 NA lens, achieving an 8nm-level resolution, while the standard EUV technology uses a 0.33 NA lens. This new NA technology allows for printing smaller feature sizes on chips, which is essential for the development of 2nm and below chip processes, and crucial for AI systems like NVIDIA Corporation's AI GPUs for AI training/inference applications, where processes below 2nm are crucial for increasing AI system computing power. Currently, NVIDIA Corporation's H100/H200 and Blackwell architecture AI GPUs predominantly use Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR's 4nm process technology, while NVIDIA Corporation's next-generation Rubin architecture AI GPU and Apple Inc.'s next-generation AI smartphone chips are expected to adopt Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR's more advanced 2nm process. In summary, the article discusses ASML Holding NV ADR's investment in Mistral AI and its strategic collaboration, the reactions from both Morgan Stanley and UBS Group AG, the importance of High-NA EUV lithography machines for ASML Holding NV ADR, and the potential future growth prospects and catalysts for the company.