(Bloomberg) — The bullish chorus on Taiwan Semiconductor Manufacturing Co. is getting louder as a stock market rally pushes the market cap closer to the $1 trillion mark.
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A slew of Wall Street brokers raised their price targets on TSMC this week, citing rising AI-related demand and potential price increases in 2025 to boost profits. Goldman Sachs Group Inc. is the most bullish of all, raising its price target 19% to NT$1,160 as it sees manufacturing prices for three- and five-nanometer chips rising by a “low single-digit percentage.”
JPMorgan Chase & Co. says TSMC “could raise its 2024 revenue guidance and potentially shift its capital expenditures to the higher side of expectations,” and expects AI to contribute 35% of total revenue by 2028. Citigroup Inc. and Morgan Stanley have also raised their price targets due to stronger earnings prospects.
The foundry sector leader has emerged as a major beneficiary of the increasing adoption of artificial intelligence, with its advanced technology and valuation making it a favorite play among global investors. TSMC has also done well as Nvidia Corp.’s top supplier of advanced chips. – recently crowned the world’s most valuable company.
TSMC acquired Berkshire Hathaway Inc. last week, becoming the eighth largest company in the world in terms of market capitalization, based on the company’s US-listed ADRs. The 73% gain on depository receipts this year has boosted the company’s market value to $932 billion, below the $1 trillion threshold.
“We now see even more attractive risk-reward for TSMC amid growing positive sentiment around AI,” Goldman analysts including Bruce Lu wrote in a note on Tuesday. “With the continued spread of AI, we see TSMC as one of the key beneficiaries.”
(Updates with additional details from analyst reports.)
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