The storage giants are expanding production, and the semiconductor equipment is on the super trend! ASML leads the European stock market into a new bull market.

With the storage chip giant Micron Technology, Inc. from the United States announcing record-breaking capital expenditures and the two superpowers in the global storage chip industry - the Korean storage giants Samsung Electronics and SK hynix planning to invest approximately 80 trillion Korean won (approximately $518 billion) in building four semiconductor wafer factories in the southwest region, with Samsung Electronics and SK hynix each building two, semiconductor equipment giants such as ASML Holding NV ADR and Applied Materials are entering a new round of super growth driven by the large-scale expansion of AI chips and storage chips. This is also the core logic behind the increasingly bullish outlook for the European stock market by Wall Street strategists in recent days, especially considering that the European stock market boasts the headquarters of many of the top semiconductor equipment suppliers in Europe such as ASML Holding NV ADR, ASM International, and BE Semiconductor. ASML Holding NV ADR is already the highest market-valued listed company in Europe, and the ADR price (ASML.US) of ASML Holding NV ADR traded on the US stock market has soared by 70% this year, significantly outperforming the S&P 500 index and the Nasdaq 100 index. This giant in the lithography machine industry directly benefits from the unprecedented global expansion cycle of AI chips and storage chips: the expansion of advanced logic, advanced DRAM, and HBM-related processes all rely on EUV/DUV lithography equipment. The supercycle of capital expenditures on storage chips by the Korean storage giants and Micron Technology is providing a strong basis for profit and valuation upgrades for European equipment giants such as ASML Holding NV ADR and Besi; if the European stock market shifts from the recovery of GEO Group Inc in the second half of the year to a bullish narrative logic of "profit diffusion + AI capital expenditure drive + cyclical sector rotation up", these high-weighted semiconductor equipment super leaders are likely to become the core drive for the strong rise of European stock indices. However, once the market begins to worry about excessive expansion of storage production, further lengthening of the return cycle of AI capital expenditures by North American tech giants, or escalating export restrictions, stock price fluctuations will also escalate in tandem. When the European stock market suffered significant losses earlier this year due to the Iran war outbreak in late February in the Middle East, Mislav Matejka, Chief Equity Market Strategist at J.P. Morgan, predicted that the decline in European stocks would be temporary. Now, led by Matejka's team, they are increasingly bullish on the European stock market due to the unprecedented wave of expansion in AI chips and storage chips, making them the most optimistic bulls among Wall Street forecasters tracked by Bloomberg Intelligence. Matejka and his team have raised the year-end target for the Stoxx Europe 600 benchmark index from 630 points to 680 points, implying a potential increase of about 10% from the current all-time high level. This new forecast exceeds the highest target of 670 points set by Barclays PLC Sponsored ADR and HSBC in an earlier Bloomberg Intelligence survey this month. J.P. Morgan is aggressively betting on Europe's outperformance in the second half of the year in the stock market, ushering in a period of revaluation for the cyclical sector. It is understood that Matejka's team of J.P. Morgan strategists wrote in a recent research report, "After three years of basically flat performance, overall profit growth in the euro area is significantly accelerating this year." They predict that earnings per share of the Stoxx Europe 600 index will increase by 18% in 2026, and a further 12% in 2027 on a strong basis. "If we see broadening market breadth in the second half of the year, Europe could once again become an attractive bull market story." As shown in the chart above, J.P. Morgan strategists believe that the European stock market still has further upside potential - the targets given by their team exceed the survey levels. Note: Average and median targets from the previous Bloomberg Intelligence survey as of June 19. In the first two months of 2026, the European stock market outperformed the US stock market until the outbreak of the Iran war. The region's heavy dependence on Middle Eastern energy imports, its excessive weight on energy-intensive industries, and its direct exposure to Middle Eastern energy during the GEO Group Inc political conflict were significant drags during the Middle East conflict. However, since the preliminary peace agreement between the US and Iran in mid-June, the euro area stock market has begun to outperform once again, including the US and other Western stock markets. The strategists wrote, "Encouragingly, since the start of the Iran conflict, Wall Street has significantly raised its EPS forecasts for the European stock market in 2026." "As the market continues to digest and alleviate the impact of the conflict with GEO Group Inc, and as strong expectations for semiconductor equipment giants drive the upward trend, the euro area stock market should benefit." Matejka turned more bullish on European stocks in October 2025, compared to the US stock market, and maintained this bullish view during the Iran war, believing that the weakness caused by the political conflict with GEO Group Inc provided a significant buying opportunity. Earlier this month, he continued to firmly predict that stocks in the region would outperform the US stock market in the second half of the year. The team of strategists also raised the target for the Stoxx 50 index of the euro zone from 6350 points to 6800 points, implying a 9% increase from the current level. These strategists unanimously expect a significant rebound in key activity indicators such as the Purchasing Managers' Index, as well as a more stable global macroeconomic growth, to support overall earnings benchmarks for European companies in the second half of this year. They wrote that leading stocks driving the index will include consumer staples, as well as the semiconductor equipment sector, with strong momentum in industrial, mining, and banking giants. On the other hand, the strategists noted that stronger economic activity means that defensive stocks overall should not be favored uniformly, and if oil prices continue to decline, energy stocks will have further downside potential. They also hold a relatively cautious stance on business services, software, and media. The record-breaking capital expenditures by Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR, Intel Corporation, and Samsung around AI chips, indicating that AI data centers are moving from massive purchases of AI GPUs/ASICs and data center CPUs to a significant expansion into advanced packaging, advanced processes, and manufacturing capacity for HBM/DRAM, NAND storage chip components, Ethernet infrastructure, and data center optical interconnects in the urgent need for expansion in the AI computing infrastructure sector. From the perspective of production expansion logic, ASML Holding NV ADREUV/DUV lithography machines are not ordinary semiconductor devices, but bottlenecks for advanced logic chips, AI accelerators, and HBM-related high-end DRAM processes; in addition, shortages of AI chips, HBM/DRAM tightness, and structural lifts in NAND demand all point to similar bottlenecks in the AI computing infrastructure supply: advanced computing power is not just long-term shortage of GPUs/TPUs, but also a lack of wafer capacity, advanced chip processes, advanced packaging capacity, and huge gaps in storage chip capacity, which lead to deficiencies in etching/deposition/measuring control/advanced packaging equipment and lithography throughput; meanwhile, Wall Street analysts believe that such supply constraints are pricing the semiconductor equipment chain back from "cyclical recovery trading" to "AI computing capital spending supercycle trading." ASML Holding NV ADR and other semiconductor equipment giants are seizing the super windfall of AI computing shortages. The massive expansion of the two Korean storage giants and the record-breaking performance and capital expenditures of Micron Technology have strengthened the medium-term growth logic of the European semiconductor equipment chain, especially for companies like ASML Holding NV ADR and Besi, which are "AI computing sellers." J.P. Morgan has raised the year-end target for the Stoxx Europe 600 from 630 points to 680 points and emphasized that the semiconductor equipment giants leading the upward trend, the recovery of profits in the euro area, the diminishing impact of the GEO Group Inc conflict, and improved market breadth are the macro foundations for the reevaluation of European stocks; If the cyclic sectors of semiconductors, industry, banks, and consumers take the lead in a rotation-style rise, the European market will no longer just be a defensive recovery but will become a bullish market driven by profit upgrades. Semiconductor equipment is the most influential "hard technology weight" along this path of European stock market growth. The Korean government revealed that Samsung Electronics and SK hynix will each build two new wafer fabs in the southwest of Korea, with a total investment of 80 trillion won, approximately $518.3 billion; Korea also plans to invest 550 trillion won in AI data centers by 2029, over 1,000 trillion won by 2035, and to double DRAM production in five years. For semiconductor equipment manufacturers, expanding storage chip production is not simply about building more production lines, but investing heavily in building more clean rooms, as well as demand driving for HBM, advanced DRAM, enterprise-level SSDs, 3D NAND, and advanced packaging, all contributing to an unprecedented demand for lithography, etching, deposition, measurement, material engineering, and advanced packaging equipment. According to analysts who are optimistic about the stock price and fundamental prospects of the semiconductor sector, any dynamics related to capacity expansion by chip manufacturers such as Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR and Samsung will be positive catalysts for ASML Holding NV ADR that covers EUV lithography and for semiconductor equipment giants that focus on etching, thin film deposition, and CMP processes, as well as 2.5D/3D advanced packaging. ASML Holding NV ADR benefits from the increase in layers of advanced DRAM/EUV and the expansion of logic processes; Lam Research benefits from the high aspect ratio (HAR) etching/deposition and complex stacking of HBM, DRAM, and 3D NAND; Applied Materials benefits from the demand expansion of DRAM, advanced packaging, material engineering, and AI chip types. At the fundamental basis, these semiconductor manufacturing giants have to purchase ASM International's unique atomic layer deposition equipment and BE Semiconductor's "hybrid bonding" advanced packaging high-end semiconductor equipment, exclusive product lines from European semiconductor equipment leaders. For the prospects of ASML Holding NV ADR stock price, European financial giant Barclays PLC Sponsored ADR has significantly raised its already aggressive target price from 1900 to 2000. ASML Holding NV ADR's European shares were hovering around 1580 on Monday. Citigroup on Wall Street predicts in an optimistic scenario that the global WFE market size will increase from around $145 billion in 2026 to $200 billion in 2027, and to $250 billion in 2028. Citigroup emphasizes that the multi-step reasoning driven by the AI intelligence wave led by Anthropic will dramatically increase the demand for KV cache and intermediate storage, when high-cost HBM and DRAM cannot economically handle all memory requirements, NAND, XL-Flash, high-performance storage layers, and related process equipment demand will be systematically raised. ASML Holding NV ADR, Applied Materials, Lam Research, and KLA, are semiconductor equipment giants favored by Wells Fargo & Company and Citigroup. Applied Materials is ubiquitous in chip factories. Unlike ASML Holding NV ADR, which has always focused on lithography, Lam Research's focus is more on etching, cleaning, patterning, and key thin film processes, especially focusing on the high aspect ratio (HAR) etching/deposition and related processes required for 3D NAND storage, high-end devices provided by Applied Materials play a crucial role in almost every step of chip manufacturing, including atomic layer deposition (ALD), chemical vapor deposition (CVD), physical vapor deposition (PVD), rapid thermal processing (RTP), CMP, wafer etching, ion implantation, and other important chip manufacturing processes.