All AI roads lead here: TSMC stock target raised as analysts see more upside

Last month, analysts at Bank of America said they see Taiwan Semiconductor Manufacturing (NYSE:TSM) as “a key enabler of AI with long-lasting leadership,” lifting their price target on the stock by $120. This bullish stance on the semiconductor contract manufacturer is broadly shared on Wall Street, with TSMC stock witnessing a series of price objective hikes and optimistic comments recently.

All AI roads lead here

Known for producing chips for some of the world’s leading AI processors, TSMC saw its shares surge more than 33% and 36% in Taipei and the US year-to-date, respectively.

In March, JPMorgan analysts labeled the chipmaker as a critical player “for almost all AI processing at the data center and the edge.”

The investment bank forecasts that TSMC will maintain a dominant position in the AI processor market, holding over 90% of the market share in the next three to four years. They also anticipate that TSMC's revenue from AI will grow from 6% in 2023 to 27% by 2027.

These top line growth projections are mainly attributed to significant advancements in Taiwan Semi’s high-performance computing (HPC), increased in-sourcing by system companies, and a robust pipeline for its N3 technology in 2024 and 2025. Moreover, the launch of N2 technology is expected in 2026.

"We expect Intel (NASDAQ:INTC) to account for ~ 2-3% of revenues for TSMC in 2024, rising to 7-9% in 2025," said JPMorgan analysts in a note last month.

Analysts boost price targets on TSMC stock

Wall Street’s bullish adjustments on TSMC stock continued in more recent weeks as well, with Susquehanna and Barclays analysts also hiking their 12-month target prices.

A Susquehanna analyst lifted earnings estimates and the price objective on semiconductor marker’s US-listed shares from $160 to $180 on Tuesday, implying nearly 30% upside from the latest closing price.

“We are increasing CY24/25 EPS estimates as recent checks suggest blended ASPs tracking better than expected,” the analyst said.

Sharing this bullish sentiment is also Lynx Equity Strategies, whose team of analysts just raised the price target on Taipei-listed TSMC stock to NT$900 from the NT$750 set a few months back.

“After the previous earnings report wrote management was perhaps being conservative in annual guidance of revenue up low-mid 20s, their conservatism, in our view, due to uncertainty in the timing of new customers later in the year,” Lynx analysts wrote.

“With a quarter now behind us, we expect the Company to have gained more visibility into the rest of the year. We expect upside to our unchanged estimate of annual revenue up 27% vs. consensus up 23%.”

The equity research firm predicts a faster initial production ramp-up for Taiwan Semi’s 3nm technology compared to its 5nm process.

Where the 5nm revenue contribution stabilized at around 20% for two years post-launch, the 3nm node has already achieved 15% of total revenue within two quarters of its introduction, analysts highlighted.

They also expect a shorter interval between the 3nm and upcoming 2nm ramps, reduced to two years from the three-year gap observed between 5nm and 3nm advancements. This acceleration is attributed to the company’s proactive scheduling and a rise in demand for advanced technologies, which bodes well for semiconductor capital equipment companies.

“As data centers accelerate the pace of transition to AI workloads and as they migrate to more power-efficient general computation servers, we think TSM is a key beneficiary. We expect the customer base at 3nm to expand beyond AAPL. At the 2nm node, yet to be introduced, we think AAPL is likely the lead customer,” analysts said.

Begin trading today! Create an account by completing our form

Privacy Notice

At One Financial Markets we are committed to safeguarding your privacy.

Please see our Privacy Policy for details about what information is collected from you and why it is collected. We do not sell your information or use it other than as described in the Policy.

Please note that it is in our legitimate business interest to send you certain marketing emails from time to time. However, if you would prefer not to receive these you can opt-out by ticking the box below.

Alternatively, you can use the unsubscribe link at the bottom of the Demo account confirmation email or any subsequent emails we send.

By completing the form and downloading the platform you agree with the use of your personal information as detailed in the Policy.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76.3% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Back to top

Office network

One Financial Markets is the trading name of Axi Financial Services (UK) Ltd, a company registered in England with company number 6050593. Axi Financial Services (UK) Ltd is authorised and regulated by the Financial Conduct Authority in the UK (under firm reference number 466201) and the Financial Sector Conduct Authority in South Africa (with FSP number 45784).

The information on this site is not directed at residents of the United States, Belgium, Poland or any particular country outside the UK and is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

www.onefinancialmarkets.com is owned and operated by Axi Financial Services (UK) Ltd.

Award winning broker
We have been presented with a number of awards that recognise the quality of our service and dedication to our clients :

Best FSA Regulated Broker
Saudi Money Expo

Best Education Product
Saudi Money Expo

Best Broker - Online Trading
IAIR Awards

Best Institutional Broker
Saudi Money Expo

Best FX Services Broker
CN Forex

Top International
FX Broker 2015

Saudi Money Expo

Broker of the Year
Online Trading – Middle East

IAIR Awards

Best Forex
Customer Service 2018

JFEX Awards

We accept the following payment methods: