As shares of chipmaker Nvidia surge , Bank of America is also bullish on semiconductor equipment maker ASML Holding. The firm reiterated its buy rating on Dutch-based semiconductor equipment company. Analyst Didier Scemama raised his price target on U.S.-traded ASML shares to $855 from $837, implying a 20.6% rally from Thursday’s close. The stock has surged almost 30% in 2023. “We continue to view [semiconductor capital equipment] as the best way to invest in [the AI] thematic in Europe and raise POs, as sector multiples expand reflecting the scarcity of options in Europe to invest in the generative AI thematic,” Scemama said in a Friday note. “ASML has industrialized next gen EUV (Extreme Ultraviolet) lithography technology, which we believe will underpin many of the disruptive trends of this decade,” Scemama said. ASML YTD mountain ASML in 2023 Lithography tools are a “critical part” of the semiconductor manufacturing process, according to the bank. Scemama estimates ASML currently holds almost 90% market share in making lithography tools. “The company benefits from technology transitions as well as new additions in leading edge logic and memory chip capacity,” he added. The analyst also sees the company’s a revenue compound annual growth rate of 17% over the next four years for ASML. Scemama’s price target increase follows a sharp jump in Nvidia shares. The chipmaker rallied to an all-time high Thursday on the back of strong revenue guidance for the current quarter, as demand for AI chips soars. Many analysts cheered the news by hiking their price targets on Nvidia. Shares were up 1.4% during premarket trading Friday. —CNBC’s Michael Bloom contributed to this report.