Quilter Cheviot Global Head of Technology Research Ben Barringer said ASML Holding NV (NASDAQ:ASML) remains strongly positioned to benefit from rising global chip demand, with investor focus increasingly shifting toward 2027 as the next key inflection point.

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2026 Strength, 2027 Acceleration In Focus

Barringer told CNBC on Wednesday that the semiconductor sector typically looks 18 months ahead, making 2027 the primary focus for investors. He noted that markets already expect 2026 to deliver strong growth, with a potential acceleration in 2027.

As a key signal, he pointed to capital expenditure trends, highlighting that Taiwan Semiconductor Manufacturing Company Ltd (NYSE:TSM) expects 32% CapEx growth in 2026 and has indicated a similarly strong outlook for 2027. He added that further clarity will come from memory players such as SK Hynix. But, parsing CapEx remains complex, especially for Samsung Electronics Co, Ltd (OTC:SSNLF), where spending spans both memory and logic. Overall, he described the CapEx outlook as robust, supported by hyperscale customers including Amazon.com Inc (NASDAQ:AMZN), Microsoft Corp (NASDAQ:MSFT), Alphabet Inc.‘s (NASDAQ:GOOGL)(NASDAQ:GOOG) Google, and Meta Platforms Inc (NASDAQ:META).

AI Demand Strong, But Cycles Remain

Barringer explained that semiconductor cycles typically fall into two categories: macro-driven demand cycles and inventory-driven supply-demand cycles.

He said memory remains one of the most cyclical segments, usually following a two-year upswing and two-year downswing, reflecting the time required for new supply to enter the market. While AI has emerged as a major new demand driver — particularly in memory — he said supply will eventually adjust to this demand. Despite increasing consolidation and signs of more rational market behavior, he maintained that supply-and-demand dynamics will continue to drive cycles. He noted that AI-related demand is relatively price inelastic, making it a strong and stable source of demand.

Policy Risks Could Impact Revenue

Barringer flagged regulatory risks as a key downside, particularly potential U.S. restrictions under the MATCH Act that could limit ASML's ability to ship immersion tools used at the 28-nanometer node to Chinese chipmakers.

He estimated immersion tools account for roughly 10%–15% of ASML's revenue, with China contributing about 50% of that segment, implying a potential 7%–10% impact on revenue. He noted these measures remain in early stages and follow a broader trend of chip restrictions in place since 2018. While such risks persist, Barringer said ASML continues to navigate them, supported by the fundamental reality that global chip demand remains strong.

ASML Price Action: ASML Holding shares were down 4.87% at $1,444.38 at the time of publication on Wednesday, according to Benzinga Pro data.

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