Shares of ASML have soared this year thanks to the boom in semiconductor companies and artificial intelligence. Its Dutch-listed shares have risen about 32% so far this year, while its U.S.-listed shares have soared nearly 40%. Those gains are tied to Nvidia’s stock price, which has soared this year on the back of interest in artificial intelligence. Nvidia relies on Taiwan Semiconductor Manufacturing Company (TSMC) to manufacture its graphics processing units. TSMC relies on ASML’s machines, which are necessary to make the world’s most advanced semiconductors. ASML has 100% market share in extreme ultraviolet (EUV) machines, which giants such as TSMC and Samsung use to make chips. ASML on Wednesday reported a sharp rise in second-quarter revenue and profit and raised its forecast for 2023. But it also warned of macroeconomic uncertainty. Where will the stock go? CNBC Pro pored over Wall Street research to find out. U.S.-China tensions ASML has been caught up in U.S.-China tensions recently — the Dutch government recently announced export curbs that could cut off Chinese supplies of key chipmaking tools — but the company said the new restrictions were unlikely to have a significant impact on its business. Analysts aren’t overly concerned either. UBS has a buy rating on ASML and a 12-month price target of 780 euros ($875), up about 17 percent from Tuesday’s closing price. Demand in China is likely to remain resilient in the next one to two years, the bank said in a report on July 12, citing its analysis of China’s fab equipment market. UBS said: “The duration of weak demand is a key focus and its impact to 2024 is the main concern for investors, but we think China may provide a buffer and offset more challenging areas.” Alphinity global portfolio manager Trent Masters (Trent Masters) said ASML “is caught in some money laundering in the US/China, but their leading-edge lithography equipment (EUV) is already restricted in China.” Press 5% of the order. But he described ASML as a very high-quality business that would benefit from growth in the semiconductor market. He predicts that by 2030, semiconductor market revenue will reach about $1 trillion. “ASML acts as a key equipment supplier underpinning the required technological advancements, so we could see (double-digit) to mid-teens growth over the next 3-5 years as we move through the current period of volatility,” Masters said. Morgan Stanley said in a July 4 report that the new restrictions were “largely expected.” “Further tightening by the U.S. government is likely going forward…but we still expect ASML exposure to be 3-4% of backlog,” the bank said. “We believe ASML should trade at a premium to its semiconductor peers given its dominance in an area of increasing share of overall (fab equipment) spending,” it added. ASML has a target price of €770, with a potential upside of almost 16%. In a recent report, Jefferies said the expansion of AI infrastructure will require increasingly advanced levels of semiconductors, such as graphics processing units and microprocessors. This is said to benefit companies such as ASML. But other banks are less sanguine. “Despite the optimism surrounding AI, we see high inventories in key semi-finished markets as a potential headwind to WFE growth,” JPMorgan said in a recent note. “ASML and other semi-cap stocks have rallied recently, in part due to optimism about AI’s potential and strong guidance from NVIDIA in May. Longer term, we believe AI will be a key driver of semiconductor growth, but large language models such as ChatGPT running on AI-optimized servers and resources for this technology are currently limited to data centers ,” it added. UBS said that while ASML is “clearly an AI enabler,” the incremental opportunity for Nvidia is only a low/mid-single-digit percentage of the company’s sales. “We expect ASML to play down this trend in the short term,” it said. Analysts covering the company see an average potential upside of almost 13% for its Dutch-listed shares. — CNBC’s Michael Bloom contributed to this report.