Global semiconductor lithography giant ASML reported exceptional second-quarter 2026 results on July 15, with net sales reaching €9.33 billion and a 54% gross margin, both significantly exceeding market expectations. The company raised its full-year 2026 guidance for the second time, projecting sales up to €45 billion from the previous €36 billion to €40 billion range. ASML CEO Christophe Fouquet stated that the strong performance was driven by better-than-expected sales in the Installed Base Management business, with customers accelerating capacity expansion plans. The company also announced plans to break ground on a new campus in Eindhoven this quarter that will ultimately accommodate 20,000 employees, further boosting R&D and production capabilities.
Investment bank UBS has raised its 12-month price target for Advanced Micro Devices (AMD) to $700 from $670, according to reports from CNBC TV18. The revision implies a 28% upside potential from Tuesday's closing price. The bank maintains a buy rating on the chip designer and manufacturer, signaling continued confidence in the company's prospects amid the explosive growth in global demand for AI chips. As reported by UBS analyst Timothy Arcuri, the bank expects AMD to attract more customers and expand its semiconductor chip businesses, which are expected to drive the stock higher. Bank of America is even more bullish, expecting AMD to deliver a beat-and-raise quarter driven by surging AI server demand for its EPYC CPUs and accelerators.
According to Bank of America, AMD is positioned for exceptional Q2 2026 results, with analysts expecting earnings of $1.34 per share versus $0.27 a year earlier, representing an expected EPS growth rate of 396.30%. The company's stock has demonstrated remarkable performance over recent months, with the stock doubling in value over three months, climbing 112% through Tuesday. This significant price appreciation has caught the attention of institutional investors, with UBS now raising its price target to reflect the company's improved market position and growth prospects in the semiconductor sector. The AI chip wave is creating unprecedented demand for advanced semiconductor equipment, with ASML reporting net sales of €9.33 billion in Q2 2026, significantly exceeding expectations and driving the company to raise its full-year guidance to €43-45 billion.
According to UBS analyst Timothy Arcuri's latest client note, AMD is positioned for significant customer expansion with Amazon confirmed as a major MI450x customer, and Anthropic now believed to be on the customer list. The analyst also highlighted potential partnership opportunities, noting that AMD could partner with Cerebras Systems on a fast inference solution and announce a deeper and broader push into custom Application-Specific Integrated Circuits for the data center. Bank of America notes that exceptional demand for AMD's EPYC server chips and AI accelerators could drive another beat-and-raise quarter. Recent strategic developments include AMD's 30-megawatt compute deal with Rackspace Technology and the company's acquisition of MEXT to bring memory optimization software that helps ease data center bottlenecks.
As reported by Bank of America, AMD has started ramping production of its next-generation 6th Gen EPYC processor, called Venice, on TSMC's 2nm process technology, marking a big step forward for its data center CPU roadmap. The chip is built for heavy compute jobs and AI-style workloads, with up to 256 Zen 6 cores, a new SP7 socket, and more memory channels that aim for much higher bandwidth per socket. The company's supply chain outlook has improved significantly, with significant upticks in Chip-on-Wafer-on-Substrate allocation for C2027. This development is particularly important as AMD relies on Taiwan Semiconductor Manufacturing for vital packaging services for its popular AI accelerator chips. ASML plans a 30% capacity expansion for EUV and DUV systems by 2027 to meet sustained AI chip demand, with the company indicating they will raise both EUV and immersion DUV capacity in both 2027 and 2028 by 30%.
According to Bank of America, the latest consensus view on AMD is still very positive, with a 'Strong Buy' rating based on input from 46 analysts. Their average 12-month price target sits at $508.42, which actually points to a 7.8% downside, while the street-high target price of $700 indicates a potential increase of 26.9% from current levels. Another potential catalyst may emerge when AMD hosts an 'Advancing AI 2026' event on July 22-23 in San Francisco. The company's stock is up 158% so far this year and 277.8% over the past 52 weeks, with a market value of $871 billion. UBS maintains that the next leg of growth will depend not only upon graphics chips but also on CPUs designed to handle more complex AI-style workloads, where EPYC is expected to play a big role.
