ASML (ASML -0.76%) is a linchpin of the semiconductor market. It's the world's largest producer of lithography systems, which are used to optically etch circuit patterns onto silicon wafers. It's also the only producer of high-end extreme ultraviolet (EUV) systems, used to manufacture the world's smallest, densest, and most power-efficient chips. All the top foundries, including TSMC, use its systems to manufacture their top-tier chips.
Over the past two years, ASML's stock has rallied nearly 40% and boosted its market cap to $267 billion. From 2024 to 2027, analysts expect its revenue and earnings per share (EPS) to grow at a CAGR of 10% and 17%, respectively. That steady growth should be driven by the expansion of the cloud and artificial intelligence (AI) markets, the stabilization of the PC and smartphone markets, and the mass production of even smaller and more powerful chips.

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If ASML matches analysts' estimates and still trades at 29 times its current year's earnings, its stock price could rise 20% and drive its market cap to $320 billion by 2027. That would be a respectable gain, but two less valuable chip stocks -- AMD (AMD -1.25%) and Micron (MU -2.21%) -- might eclipse its market cap within the next two years.
1. AMD
AMD is the world's second-largest producer of x86 CPUs and discrete GPUs. It trails behind Intel (NASDAQ: INTC) in x86 CPUs and Nvidia in discrete GPUs, but it has still grown rapidly over the past decade.
As a fabless chipmaker that outsources its production to TSMC, AMD wasn't plagued by the production issues and delays that affected Intel's first-party foundries. It also kept pace with Nvidia by selling cheaper gaming and data center GPUs, and it carved out a niche by selling accelerated processing units (APUs), which merge together CPUs and GPUs onto a single chip for PCs and gaming consoles.
From 2024 to 2027, analysts expect AMD's revenue and adjusted EPS to grow at a CAGR of 22% and 31%, respectively. That growth should be driven by its continued market share gains against Intel in the x86 CPU market, its brisk sales of cheaper AI-oriented data center GPUs, and the stabilization of the gaming GPU market.
AMD currently has a market cap of $257 billion and trades at 41 times this year's adjusted earnings. If it maintains that multiple and matches Wall Street's earnings estimates, its stock price could rise 90% over the next two years and boost its market cap to nearly $490 billion.
2. Micron
Micron is one of the world's top producers of DRAM and NAND memory chips. It doesn't dominate either market, but it generally manufactures denser and more power-efficient chips than its larger South Korean rivals like Samsung and SK Hynix. It's an integrated device manufacturer (IDM) that manufactures its chips at its own first-party foundries.
Micron's growth ebbs and flows with the memory market's cyclical boom-and-bust cycles. Its last bust occurred in 2023 as the PC market's post-pandemic growth spurt ended, the 5G upgrade cycle cooled off, and data centers prioritized their purchases of GPUs over memory chips.
But from fiscal 2024 (which ended last August) to fiscal 2027, analysts expect its revenue and adjusted EPS to grow at a CAGR of 28% and 109%, respectively. That growth cycle should be driven by the stabilization of the PC market, rising smartphone sales, and the purchases of more solid-state drives (SSDs) and high-bandwidth memory (HBM) chips at data centers to support the latest generative AI applications.
However, Micron's stock still trades at a modest 21 times this year's earnings, and it has a market cap of $176 billion. If it maintains that multiple and matches analysts' estimates, its stock price could rally 46% and drive its market cap to nearly $260 billion within the next two years. But if it trades at a more generous 30 times earnings, its stock price could surge 110% and propel its market cap to $370 billion. So if you think Micron's next growth cycle is just getting started, it could be a great time to buy its stock.