TSMC Rides AI Wave to $1 Trillion, Wall Street Bullish on Potential for 30% Stock Rally

Moomoo News Global wrote a column · Jul 10 14:36

$Taiwan Semiconductor (TSM.US)$ shares jumped as much as 4.8%, to touch the milestone just after the opening bell in New York on Monday, taking its share price increase this year to more than 80%. The chipmaker overtook Berkshire Hathaway earlier in June to become the world’s eighth most valuable company.

TSMC Rides AI Wave to $1 Trillion, Wall Street Bullish on Potential for 30% Stock Rally

As the exclusive supplier of crucial chips for $Apple (AAPL.US)$ and $NVIDIA (NVDA.US)$, TSMC has become a favorite play among global artificial intelligence investors. Citing surging AI-related demand and potential price hikes in 2025 to elevate earnings, a flurry of Wall Street brokerages lifted their price targets for TSMC.

Morgan Stanley analysts boost price targets on AI semi demand

Morgan Stanley raised its price target for TSMC to NT$1,180.00 from NT$1,080.00 in a note Monday, expecting the chip maker to raise its full-year sales estimate in the second-quarter earnings announcement next week. The broker also sees TSMC hiking wafer prices due to its strong bargaining power.

“TSMC’s ‘hunger marketing’ strategy seems to be working,” Morgan Stanley analysts including Charlie Chan wrote in a note Sunday. “Our latest supply chain checks indicate that TSMC is delivering a message that leading-edge foundry supply could be tight in 2025 and customers may not get sufficient capacity allocation without appreciating TSMC’s value.”

JPMorgan and Morningstar analysts also boost projections

JPMorgan analysts including Gokul Hariharan also anticipate the company will raise its revenue guidance in the earnings call.

“We expect TSMC to sound more constructive on AI accelerator demand,” he wrote in a note Sunday.

“Seeing TSMC ADRs approach $1 trillion valuation is a feat, but there’s much ahead with tech advancements extending at least into the 2040s,” said Morningstar Inc. analyst Phelix Lee.

Moreover, Nomura Holdings Inc. and Mizuho Securities Co. are also optimistic about TSMC’s second-quarter results. The maker of the world’s most advanced chips is expected to report 36% revenue growth from a year earlier, the fastest pace since the last quarter of 2022, according to data compiled by Bloomberg.

Many institutions, including Morgan Stanley, have raised their target prices and predicted that TSMC will soon revise its full-year sales expectations in its earnings report. Stay up-to-date on TSMC's earnings release dates with our Earnings Calendar! Dive in>