This chipmaker equipment stock could be a big beneficiary of Nvidia-Intel deal, says BofA

Bank of America has raised its price target on ASML to $1,082 from $833, maintaining a "Buy" rating and projecting 16% upside, driven by an anticipated surge in semiconductor equipment demand. This forecast is underpinned by the $5 billion Nvidia-Intel partnership, which is expected to enhance Intel's competitiveness and lead to increased capital expenditure on equipment. BofA also highlights a broader rise in lithography equipment demand and forecasts substantial revenue acceleration for ASML in 2027, primarily due to the opening of several new chipmaking facilities in the U.S.

Analysis

Bank of America has upgraded its price target on ASML's U.S.-listed shares to $1,082 from $833, maintaining a buy rating and signaling a potential 16% upside. The revised outlook is predicated on an anticipated recovery in semiconductor equipment demand, directly catalyzed by the recent $5 billion partnership between Nvidia and Intel. While this deal is not a direct foundry agreement, the analysis suggests it will enhance Intel's competitiveness and provide a capital injection that could fund purchases of ASML's lithography equipment. This thesis is further supported by a general rise in lithography equipment demand observed this year, which has contributed to ASML's stock gaining approximately 16% year-to-date. Looking further ahead, Bank of America models a substantial revenue acceleration for ASML in 2027, forecasting 21% year-over-year growth driven by the scheduled opening of new U.S. fabrication facilities by Intel, Samsung, and TSMC. This view places BofA within the analyst majority, as LSEG data shows 10 of 15 analysts covering the stock have a buy or strong buy rating.

Key Decisions for Investors

• Given the strong analyst conviction and multiple catalysts, investors with a positive outlook on the semiconductor capital equipment cycle could view this as a signal to maintain or initiate long positions in ASML, targeting the 16% upside to BofA's new price objective.
• A long-term investment horizon is essential, as the core of the thesis points to a significant revenue acceleration in 2027, which is dependent on the timely construction and operational ramp-up of new fabs.
• Investors should closely monitor capital expenditure announcements and project timelines from Intel, Samsung, and TSMC, as any delays in new fab openings would pose a direct risk to the long-term growth forecast for ASML.