ASML Holding NV (NASDAQ:ASML) is one of the AI stocks in the spotlight for investors. On October 6, New Street downgraded the stock to “Neutral” from Buy with a price target of €790. The firm highlighted concerns about ASML’s growth prospects beyond 2026.
The company warns that growth prospects appear weak despite strong near-term demand driven by AI. The strong outlook for AI spending in recent months has led to a rally in semiconductor capital equipment stocks, with AI capital spending likely to triple between now and 2030. This will require an estimated $130 billion in cumulative spending on wafer manufacturing equipment.
However, the company anticipates “peak acceleration this year and peak spending next,” leading to a “weak” outlook beyond 2026. “Near-term uncertainty, limited upside to 2026 guidance, and valuations 2 to 12 turns above historical averages” create a “risky setup” for ASML stock.
New Street has therefore downgraded the stock and maintained a cautious view on the sector.
ASML Holding NV (NASDAQ:ASML) develops and sells advanced semiconductor equipment, including lithography, metrology and inspection systems for chip manufacturing.
While we recognize ASML’s potential as an investment, we believe certain AI stocks offer greater growth potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that’s also benefiting significantly from Trump-era tariffs and the offshoring trend, check out our free report on best short-term AI stock.
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