TSMC Rides AI Wave to $1 Trillion, Wall Street Bullish on Potential for 30% Stock Rally
$Taiwan Semiconductor Manufacturing(TSM)$
As the exclusive supplier of crucial chips for $Apple(AAPL)$
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
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