$Taiwan Semiconductor Manufacturing(TSM)$ 

TSM can go substantially higher, but at around US$420, I would no longer call it cheap. The interesting question is whether TSMC’s earnings growth can continue to outrun the valuation.

My TSM price targets

Current analyst consensus is about US$537, with estimates ranging from $430 to $700.

Why $600+ is realistic

The fundamentals are unusually strong.

TSMC’s Q2 2026 revenue reached about US$40.2B, up 36% YoY, while net income jumped roughly 78%. HPC represented 66% of revenue, showing how strongly AI demand is flowing through TSMC.

Analyst estimates currently have 2026 revenue around NT$5.4T (+42%) and EPS around NT$106.65 (+61%). Next year’s EPS is estimated around NT$136.48.

That’s the key:

TSM is not merely getting a higher valuation — earnings themselves are exploding.

Needham recently raised its target to $530, based on its expectation that TSMC can maintain very strong growth into 2028.

What could get TSM to $700?

I’d need to see several things happen:

2. AI accelerator demand remains strong through 2027–28

4. Nvidia, AMD, Broadcom and custom AI-chip customers continue increasing orders.

6. TSMC maintains very high utilisation of advanced nodes.

8. 2nm ramps successfully.

10. CoWoS/advanced packaging remains constrained.

12. Margins remain around the current very high levels.

14. The market continues to value TSMC at ~20×+ forward earnings.

If those conditions persist, $700 isn’t crazy. In fact, the highest current analyst target is already $700.

But here’s what I’d watch carefully

At $420, TSMC’s market cap is already about US$10.9T in the current data, so another doubling requires an enormous increase in earnings.

The biggest risks are:

Taiwan geopolitical risk — probably the single biggest reason TSM trades at a discount to some US semiconductor companies.

AI capex cycle — if hyperscalers suddenly slow spending, TSMC would eventually feel it.

China/export restrictions — potentially limits growth.

Capital intensity — TSMC is spending enormous amounts to expand capacity, including its US manufacturing footprint.