Morgan Stanley cuts ASML target, removes as ‘Top Pick’

Morgan Stanley lowered the firm’s price target on ASML (ASML) to EUR 925 from EUR 1,000 and keeps an Overweight rating on the shares. The analyst also removed the shares as a “Top Pick,” in favor of Arm (ARM). While artificial intelligence infrastructure spend intact, ASML shares are “vulnerable to the unwind of inflated expectations,” the analyst tells investors in a research note. The firm trimmed estimates for 2025 and 2026 given the cuts it expects as a knock-on impact from Intel (INTC). Morgan Stanley assumes few if any orders from Intel in 2024 for low numerical aperture extreme ultraviolet systems and thinks a push-out is possible of high numerical aperture systems from 2025 to 2026. However, the firm still sees ASML as a “growth cyclical name with high-quality earnings.”