TSMC Benefits from AI Boom, Shares Near 52-Week High
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 16 hours 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: The Leader in AI Chip Market
- Market Share Growth: TSMC currently accounts for nearly 75% of global chip manufacturing revenue, playing a crucial role in AI chip production, and is expected to further solidify its market position as big tech continues to invest in AI.
- Future Investment Outlook: Global data center investments are projected to approach $7 trillion by 2030, with TSMC benefiting as a primary chip supplier, driving an estimated 25% annual earnings growth in the future.
- Stock Performance: Despite a 65% increase in stock price over the past year, TSMC's price-to-earnings ratio remains below 25, indicating its investment value in the rapidly growing AI market, attracting investor interest.
- Competitive Advantage: TSMC's dominant position in AI chip production allows it to maintain an edge over competitors, making it unlikely for other foundries to displace it, with expectations of continued new highs in the coming year.
See More
AI Investment Opportunities Continue to Heat Up
- Strong Market Demand: Despite concerns over spending on hyperscale data centers, the demand in the AI sector remains robust, driving significant growth for companies like Nvidia and Broadcom, which are expected to benefit from this trend in the coming years.
- Significant Technological Edge: Nvidia's graphics processing units (GPUs) are the industry standard for AI computing, while Broadcom collaborates with AI hyperscalers to design custom chips, ensuring their competitiveness in the AI hardware market.
- Key Semiconductor Supply Chain: Taiwan Semiconductor Manufacturing Company (TSMC) fabricates logic chips for Nvidia and Broadcom, and its new 2-nanometer chip technology promises reduced power consumption, further solidifying its critical role in the AI technology supply chain.
- Surging Cloud Computing Demand: Following their latest earnings reports, Alphabet and Microsoft saw stock price declines; however, their strong demand and revenue growth in cloud computing (39% and 48% respectively) indicate that AI investments are justified and will continue to drive their business growth.
See More
Surging AI Hardware Demand Benefits Nvidia and Broadcom
- Surging AI Hardware Demand: Nvidia and Broadcom are poised for strong growth due to massive spending in AI data centers, with Nvidia's GPUs being the industry standard for AI computing and Broadcom collaborating with AI hyperscalers to design custom chips, solidifying their market positions.
- Taiwan Semiconductor's Key Role: As the primary chip supplier for Nvidia and Broadcom, Taiwan Semiconductor plays an essential role in AI hardware components, and its new 2-nanometer chip technology promises reduced power consumption, supporting sustainable AI data center development and positioning it to benefit from rising AI spending.
- Cloud Giants' Performance: Alphabet and Microsoft reported robust cloud computing growth in their latest earnings, achieving revenue increases of 39% and 48% respectively; despite stock pullbacks, their investments in AI and strong market demand indicate significant future growth potential.
- Emerging Investment Opportunities: With ongoing AI investment trends, several stocks are emerging as potential buys, and analysts suggest that investors should consider increasing their positions during price pullbacks, particularly in companies like Nvidia and Broadcom, which are expected to shine in the coming years.
See More
Companies Poised to Reach $3 Trillion Market Cap in Three Years
- Amazon's Growth Potential: Currently valued at $2.4 trillion, Amazon is projected to reach a $3 trillion market cap in three years with an 8% annual growth rate, bolstered by strong performance in AI spending, particularly with AWS achieving a 24% revenue growth in Q4, indicating robust business health.
- Taiwan Semiconductor's AI Market Opportunity: With a current market cap of $1.72 trillion, Taiwan Semiconductor needs to achieve a 20% CAGR over the next three years, as management anticipates AI chip revenue to grow at nearly 60% CAGR, while overall company growth is expected to exceed 25% CAGR from 2024 to 2029, easily surpassing the target.
- Broadcom's Rapid Growth: Valued at $1.47 trillion, Broadcom must achieve a 27% CAGR to reach $3 trillion, but its custom AI chips are in high demand, with expectations to double AI segment revenue year-over-year by Q1 2026, driving rapid company growth.
- Market Investment Opportunities: All three companies exhibit strong growth potential in their respective sectors, making them attractive investment options for investors, especially as the overall market trends upward, positioning Amazon, Taiwan Semiconductor, and Broadcom as future market leaders.
See More
Amazon and Two Others Set to Reach $3 Trillion Market Cap
- Amazon's Growth Potential: Currently valued at $2.4 trillion, Amazon is projected to reach a $3 trillion market cap in three years with an 8% annual growth rate, which seems achievable given its historical revenue growth exceeding double digits over the past four years, and it may accelerate further due to rising AI spending.
- TSMC's AI Strategy: Taiwan Semiconductor, valued at $1.72 trillion, needs to achieve a 20% CAGR over the next three years, with management forecasting AI chip revenue growth at nearly 60% CAGR, while overall company growth is expected at 25%, positioning it well to exceed its target.
- Broadcom's Custom Chip Advantage: With a market cap of $1.47 trillion, Broadcom must achieve a 27% CAGR to reach $3 trillion in three years, leveraging partnerships with AI hyperscalers to design custom chips, which are expected to double AI segment revenue year-over-year by Q1 2026, driving rapid growth.
- Optimistic Market Outlook: As the stock market rises, more companies are expected to breach the $3 trillion market cap, with Amazon, TSMC, and Broadcom identified as potential leaders, making them attractive investment opportunities for investors looking to capitalize on future market growth.
See More
TSMC Benefits from AI Boom, Shares Near 52-Week High
- 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.
See More
TSMC: The Leader in AI Chip Market
- Market Share Growth: TSMC currently accounts for nearly 75% of global chip manufacturing revenue, playing a crucial role in AI chip production, and is expected to further solidify its market position as big tech continues to invest in AI.
- Future Investment Outlook: Global data center investments are projected to approach $7 trillion by 2030, with TSMC benefiting as a primary chip supplier, driving an estimated 25% annual earnings growth in the future.
- Stock Performance: Despite a 65% increase in stock price over the past year, TSMC's price-to-earnings ratio remains below 25, indicating its investment value in the rapidly growing AI market, attracting investor interest.
- Competitive Advantage: TSMC's dominant position in AI chip production allows it to maintain an edge over competitors, making it unlikely for other foundries to displace it, with expectations of continued new highs in the coming year.
See More
AI Investment Opportunities Continue to Heat Up
- Strong Market Demand: Despite concerns over spending on hyperscale data centers, the demand in the AI sector remains robust, driving significant growth for companies like Nvidia and Broadcom, which are expected to benefit from this trend in the coming years.
- Significant Technological Edge: Nvidia's graphics processing units (GPUs) are the industry standard for AI computing, while Broadcom collaborates with AI hyperscalers to design custom chips, ensuring their competitiveness in the AI hardware market.
- Key Semiconductor Supply Chain: Taiwan Semiconductor Manufacturing Company (TSMC) fabricates logic chips for Nvidia and Broadcom, and its new 2-nanometer chip technology promises reduced power consumption, further solidifying its critical role in the AI technology supply chain.
- Surging Cloud Computing Demand: Following their latest earnings reports, Alphabet and Microsoft saw stock price declines; however, their strong demand and revenue growth in cloud computing (39% and 48% respectively) indicate that AI investments are justified and will continue to drive their business growth.
See More
Surging AI Hardware Demand Benefits Nvidia and Broadcom
- Surging AI Hardware Demand: Nvidia and Broadcom are poised for strong growth due to massive spending in AI data centers, with Nvidia's GPUs being the industry standard for AI computing and Broadcom collaborating with AI hyperscalers to design custom chips, solidifying their market positions.
- Taiwan Semiconductor's Key Role: As the primary chip supplier for Nvidia and Broadcom, Taiwan Semiconductor plays an essential role in AI hardware components, and its new 2-nanometer chip technology promises reduced power consumption, supporting sustainable AI data center development and positioning it to benefit from rising AI spending.
- Cloud Giants' Performance: Alphabet and Microsoft reported robust cloud computing growth in their latest earnings, achieving revenue increases of 39% and 48% respectively; despite stock pullbacks, their investments in AI and strong market demand indicate significant future growth potential.
- Emerging Investment Opportunities: With ongoing AI investment trends, several stocks are emerging as potential buys, and analysts suggest that investors should consider increasing their positions during price pullbacks, particularly in companies like Nvidia and Broadcom, which are expected to shine in the coming years.
See More
Companies Poised to Reach $3 Trillion Market Cap in Three Years
- Amazon's Growth Potential: Currently valued at $2.4 trillion, Amazon is projected to reach a $3 trillion market cap in three years with an 8% annual growth rate, bolstered by strong performance in AI spending, particularly with AWS achieving a 24% revenue growth in Q4, indicating robust business health.
- Taiwan Semiconductor's AI Market Opportunity: With a current market cap of $1.72 trillion, Taiwan Semiconductor needs to achieve a 20% CAGR over the next three years, as management anticipates AI chip revenue to grow at nearly 60% CAGR, while overall company growth is expected to exceed 25% CAGR from 2024 to 2029, easily surpassing the target.
- Broadcom's Rapid Growth: Valued at $1.47 trillion, Broadcom must achieve a 27% CAGR to reach $3 trillion, but its custom AI chips are in high demand, with expectations to double AI segment revenue year-over-year by Q1 2026, driving rapid company growth.
- Market Investment Opportunities: All three companies exhibit strong growth potential in their respective sectors, making them attractive investment options for investors, especially as the overall market trends upward, positioning Amazon, Taiwan Semiconductor, and Broadcom as future market leaders.
See More
Amazon and Two Others Set to Reach $3 Trillion Market Cap
- Amazon's Growth Potential: Currently valued at $2.4 trillion, Amazon is projected to reach a $3 trillion market cap in three years with an 8% annual growth rate, which seems achievable given its historical revenue growth exceeding double digits over the past four years, and it may accelerate further due to rising AI spending.
- TSMC's AI Strategy: Taiwan Semiconductor, valued at $1.72 trillion, needs to achieve a 20% CAGR over the next three years, with management forecasting AI chip revenue growth at nearly 60% CAGR, while overall company growth is expected at 25%, positioning it well to exceed its target.
- Broadcom's Custom Chip Advantage: With a market cap of $1.47 trillion, Broadcom must achieve a 27% CAGR to reach $3 trillion in three years, leveraging partnerships with AI hyperscalers to design custom chips, which are expected to double AI segment revenue year-over-year by Q1 2026, driving rapid growth.
- Optimistic Market Outlook: As the stock market rises, more companies are expected to breach the $3 trillion market cap, with Amazon, TSMC, and Broadcom identified as potential leaders, making them attractive investment opportunities for investors looking to capitalize on future market growth.
See More
TSMC Benefits from AI Boom, Shares Near 52-Week High
- 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.
See More
