ASML Holding NV (ASML) just did something impressive: it hit a 52-week high on Thursday and sailed past the $500 billion market cap milestone. That's half a trillion dollars for a company that makes the machines that make the chips that power, well, everything these days.

Wall Street's Bullish Bet

Two major banks are lining up behind ASML with some seriously optimistic forecasts. Morgan Stanley and RBC Capital both see massive upside as AI-driven chip investment shows no signs of slowing down.

Morgan Stanley is particularly enthusiastic, suggesting the stock could surge as much as 70% in a best-case scenario. The logic is straightforward: chipmakers are spending aggressively to keep up with artificial intelligence demand, and ASML makes the equipment they absolutely need. The Dutch semiconductor equipment maker ranks among Morgan Stanley's top picks, and the bank's confidence got an extra boost after Taiwan Semiconductor Manufacturing Co Ltd (TSM)—ASML's biggest customer—signaled that AI-related capital spending remains robust, according to Bloomberg.

Memory, EUV, and the AI Infrastructure Play

RBC Capital analyst Srini Pajjuri jumped in on Wednesday with fresh coverage, slapping an Outperform rating on ASML and setting a price target of $1,550. His thesis? ASML is perfectly positioned to benefit from sustained AI investment, even as some investors worry about an AI bubble.

Pajjuri expects hyperscale capital spending to remain strong for the next 18 to 24 months, which translates directly into continued demand for wafer fab equipment. He's particularly bullish on several converging trends: tight memory supply, rising adoption of high-bandwidth memory, and the shift toward more advanced Dynamic Random Access Memory (DRAM) nodes. All of these developments boost demand for ASML's tools, especially as High Bandwidth Memory (HBM) growth drives increased use of Extreme Ultraviolet (EUV) lithography.

Infrastructure bottlenecks might delay some projects, but Pajjuri doesn't see that as a problem for ASML. He also points to favorable geopolitics and renewed competition at the cutting edge as additional positives working in the company's favor.

Taiwan Semi's Spending Spree Seals the Deal

Here's where things get really interesting. Taiwan Semiconductor is strengthening the bull case for ASML by dramatically increasing its capital spending to meet exploding AI chip demand. That spending flows directly into future orders for chipmaking equipment.

When Taiwan Semiconductor announced its 2026 capital expenditure plan of $52 billion to $56 billion—well above what the market expected—investors pushed ASML's market value past $500 billion for the first time. The higher budget means materially more spending on advanced manufacturing tools, and that's exactly where ASML dominates. The stock has already gained roughly 25% so far in 2026.

Price Action: ASML shares were trading up 1.46% at $1,351.00 during Friday's premarket session, hovering near the 52-week high of $1,358.00.