TSMC Benefits from AI Boom, Shares Near 52-Week High
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 day ago
0mins
Should l Buy TSM?
Source: Benzinga
- Significant Revenue Growth: TSMC's January revenue surged 36.8% year-over-year to NT$401.3 billion (approximately $12.7 billion), exceeding the company's full-year growth expectation of 30%, indicating robust market demand and execution strength.
- Analyst Rating Upgrade: DA Davidson analyst Gil Luria initiated coverage with a Buy rating and a $450 price target, highlighting TSMC's reliability and cost efficiency in navigating complex architectural shifts, further solidifying its market position.
- Big Tech Spending Boost: With Google and Amazon planning capital expenditures of $175 billion to $185 billion and $200 billion respectively, analysts project Big Tech's capex to reach $550 billion to $600 billion by 2026, driving growth in the semiconductor sector.
- Strong Stock Performance: As of Friday, TSMC shares rose 0.54% to $370.07, reflecting investor confidence in the company's continued growth in an AI-driven market environment.
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Analyst Views on TSM
Wall Street analysts forecast TSM stock price to fall
8 Analyst Rating
7 Buy
1 Hold
0 Sell
Strong Buy
Current: 368.100
Low
63.24
Averages
313.46
High
390.00
Current: 368.100
Low
63.24
Averages
313.46
High
390.00
About TSM
Taiwan Semiconductor Manufacturing Co Ltd is a Taiwan-based integrated circuit foundry service provider. The Company is primarily engaged in integrated circuit manufacturing services. It offers advanced process technologies, specialised process solutions, advanced photomask and silicon stacking, and packaging-related technologies, while supporting a comprehensive design ecosystem. The Company's products serve diverse electronic sectors including artificial intelligence, high-performance computing, wired and wireless communications, automotive and industrial equipment, personal computing, information applications, consumer electronics, smart internet of things, and wearable devices.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
TSMC Controls 99% of AI Processor Foundry Market
- Market Dominance: TSMC controls 99% of the foundry market for AI server compute and custom AI processors, positioning itself as a critical technology enabler for emerging AI giants like Anthropic, thereby solidifying its leadership in the semiconductor industry.
- Revenue Growth Momentum: In 2025, TSMC achieved a 36% revenue increase to $122.4 billion, with January 2026 revenue growing nearly 37% year-over-year, indicating potential to exceed its 30% growth target and boosting investor confidence.
- AI Chip Market Outlook: RBC Capital Markets projects AI chip sales to rise from $220 billion last year to over $550 billion by 2028, placing TSMC in a prime position to capitalize on this lucrative market as the preferred foundry for AI chip designs.
- Investment Appeal: TSMC's forward earnings multiple of 26 aligns closely with the Nasdaq-100 index, and its earnings are expected to grow faster than the broader market, suggesting that investors are unlikely to go wrong with this semiconductor giant.
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TSMC Leads Growth in AI Chip Market
- Market Share Advantage: TSMC holds a 99% share in AI server compute and custom AI processor manufacturing, making it a crucial enabler for emerging AI giants like Anthropic, thereby solidifying its leadership in the semiconductor industry.
- Significant Revenue Growth: In 2025, TSMC's revenue surged by 36% to $122.4 billion, with January 2026 revenue growing nearly 37% year-over-year, indicating potential to exceed its 30% growth target and boosting investor confidence.
- AI Chip Market Outlook: RBC Capital Markets projects AI chip sales to rise from $220 billion last year to over $550 billion by 2028, positioning TSMC as the foundry of choice for AI chip designs, ready to capitalize on this lucrative market opportunity.
- Enhanced Investment Value: TSMC's forward earnings multiple of 26 aligns with the Nasdaq-100 index, and its earnings growth is expected to outpace the broader market, suggesting that investors will not be disappointed with this semiconductor giant.
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- Cloud Computing Growth: Alphabet's cloud computing revenue surged 48% year-over-year last quarter, with TPU chips providing a competitive edge in AI infrastructure investments, which are expected to further drive business expansion.
- TSMC's Market Position: As the world's largest chip foundry, TSMC holds a near-monopoly in advanced chip manufacturing, leveraging high yields and strong pricing power, making it an indispensable partner in the semiconductor value chain and poised to benefit from the booming AI infrastructure market.
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- Cloud Business Growth: Alphabet's cloud computing segment experienced a remarkable 48% year-over-year revenue growth last quarter, leveraging the cost benefits of its TPUs, with plans to increase investment in AI infrastructure to solidify its market position further.
- Key Role in Semiconductor Industry: Taiwan Semiconductor Manufacturing Company (TSMC), as the world's largest chip foundry, plays an indispensable role in the semiconductor value chain, achieving high yields at scale and ramping up investments to meet surging chip demand, positioning itself as a long-term investment opportunity.
See More
TSMC Controls 99% of AI Processor Foundry Market
- Market Dominance: TSMC controls 99% of the foundry market for AI server compute and custom AI processors, positioning itself as a critical technology enabler for emerging AI giants like Anthropic, thereby solidifying its leadership in the semiconductor industry.
- Revenue Growth Momentum: In 2025, TSMC achieved a 36% revenue increase to $122.4 billion, with January 2026 revenue growing nearly 37% year-over-year, indicating potential to exceed its 30% growth target and boosting investor confidence.
- AI Chip Market Outlook: RBC Capital Markets projects AI chip sales to rise from $220 billion last year to over $550 billion by 2028, placing TSMC in a prime position to capitalize on this lucrative market as the preferred foundry for AI chip designs.
- Investment Appeal: TSMC's forward earnings multiple of 26 aligns closely with the Nasdaq-100 index, and its earnings are expected to grow faster than the broader market, suggesting that investors are unlikely to go wrong with this semiconductor giant.
See More
TSMC Leads Growth in AI Chip Market
- Market Share Advantage: TSMC holds a 99% share in AI server compute and custom AI processor manufacturing, making it a crucial enabler for emerging AI giants like Anthropic, thereby solidifying its leadership in the semiconductor industry.
- Significant Revenue Growth: In 2025, TSMC's revenue surged by 36% to $122.4 billion, with January 2026 revenue growing nearly 37% year-over-year, indicating potential to exceed its 30% growth target and boosting investor confidence.
- AI Chip Market Outlook: RBC Capital Markets projects AI chip sales to rise from $220 billion last year to over $550 billion by 2028, positioning TSMC as the foundry of choice for AI chip designs, ready to capitalize on this lucrative market opportunity.
- Enhanced Investment Value: TSMC's forward earnings multiple of 26 aligns with the Nasdaq-100 index, and its earnings growth is expected to outpace the broader market, suggesting that investors will not be disappointed with this semiconductor giant.
See More
Cryptocurrency Market Slump and Tech Stock Opportunities
- Cryptocurrency Market Decline: The overall cryptocurrency market has fallen over 45% since reaching a high of $4.28 trillion on October 6, 2025, primarily driven by Bitcoin's price drop and institutional ETF withdrawals, highlighting the market's heavy reliance on sentiment and liquidity.
- Alphabet's Strong Earnings: Alphabet reported $113.8 billion in revenue for Q4, an 18% year-over-year increase, with net income of $34.45 billion, up nearly 30%, although the market reacted cautiously to its $185 billion AI infrastructure spending, the rapid growth of its cloud computing division indicates strong business potential.
- TSMC's Market Share Growth: Taiwan Semiconductor Manufacturing increased its market share from 66% to 72% in Q3, with Q4 revenue reaching $33.73 billion, a 25.5% year-over-year increase, and guidance for even better revenue in Q1, showcasing its leadership and robust growth prospects in the semiconductor industry.
- Oracle's Cloud Computing Growth: Oracle generated $7.97 billion in revenue in Q2 of fiscal 2026, a 34% increase year-over-year, with cloud computing becoming its largest revenue driver; despite over $100 billion in debt, its growth potential remains significant compared to the risks associated with cryptocurrencies.
See More
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- Attractive Valuation for Sandisk: Despite Sandisk's (SNDK) stock price doubling this year, its forward P/E ratio remains at 15 times, indicating strong attractiveness for fiscal 2026, with expectations of robust revenue growth driven by the recovery in the flash memory market over the coming years.
- Surging NAND Prices: The surge in demand for high-performance solid-state drives in AI data centers has led to a significant increase in NAND prices, boosting Sandisk's sales and gross margins, which is expected to enhance its competitive position and solidify its market share.
- TSMC's Market Dominance: Taiwan Semiconductor Manufacturing (TSM), as the world's largest foundry, has a forward P/E of about 26 times, and despite trading near all-time highs, its central role in AI infrastructure makes it a valuable investment, with AI chip revenue projected to grow at over 50% annually through 2029.
- Strong Pricing Power: TSMC's near-monopoly in advanced chip manufacturing, characterized by high pricing power and low defect rates, positions it as a crucial partner for chip designers, ensuring continued benefits from the surging demand for AI chips in the future.
See More
Investment Recommendations for Market Leaders
- Google's Market Dominance: Alphabet commands approximately 90% market share in online search, solidifying its competitive edge through its default search engine status on Chrome and Android, ensuring a steady revenue stream and market leadership.
- AI Technology Advantage: Alphabet's Gemini AI model, trained using proprietary TPU chips, offers a significant cost advantage over Nvidia's GPUs, fostering growth in its search business and enhancing its competitive position in the AI sector.
- Cloud Computing Growth: Alphabet's cloud computing revenue surged 48% year-over-year last quarter, with TPU chips providing a competitive edge in AI infrastructure investments, which are expected to further drive business expansion.
- TSMC's Market Position: As the world's largest chip foundry, TSMC holds a near-monopoly in advanced chip manufacturing, leveraging high yields and strong pricing power, making it an indispensable partner in the semiconductor value chain and poised to benefit from the booming AI infrastructure market.
See More
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- Market Leader Advantage: Alphabet commands approximately 90% of the online search market, establishing a strong moat through its Chrome browser and Android OS, which reinforces its dominant position in internet access and enhances its competitive edge.
- AI Technology Competitiveness: Alphabet's Gemini AI model, trained using its proprietary TPU chips, offers a significant cost advantage over competitors like Nvidia's GPUs, thereby driving growth in its search business and showcasing its innovation in AI.
- Cloud Business Growth: Alphabet's cloud computing segment experienced a remarkable 48% year-over-year revenue growth last quarter, leveraging the cost benefits of its TPUs, with plans to increase investment in AI infrastructure to solidify its market position further.
- Key Role in Semiconductor Industry: Taiwan Semiconductor Manufacturing Company (TSMC), as the world's largest chip foundry, plays an indispensable role in the semiconductor value chain, achieving high yields at scale and ramping up investments to meet surging chip demand, positioning itself as a long-term investment opportunity.
See More
