Advanced semiconductors are the driving force behind the current surge in artificial intelligence (AI), leading to significant shifts in the stock market for key industry players. While Nvidia (NASDAQ: NVDA) has captured substantial attention with its remarkable $3 trillion market capitalization increase and overall achievements, another crucial player, the Taiwan Semiconductor Manufacturing Company (NYSE: TSM), stands out for its technological prowess and strategic importance.
Recently, TSM solidified its position by entering an agreement to commence production within the United States, alongside an impressive 80.43% year-to-date (YTD) surge in stock price to $183.34 per share. Analysts widely anticipate that TSM’s stock will maintain its impressive performance in the market.
TSM’s stock has notably surpassed analysts’ predictions, evident in its rapid rise beyond projected targets. With an impeccable ‘strong buy’ score from all 11 experts on the stock analysis platform TipRanks, TSM has garnered considerable attention for its bullish outlook.
Barclays, a prominent banking institution, initially estimated TSM’s value at $170 within 12 months, only to witness the semiconductor giant outperforming this projection swiftly. Similarly, Bank of America’s analysis on June 11, heavily influenced by TSM’s significance in Apple’s AI partnership with OpenAI, shifted from bullish to bearish as circumstances evolved.
Despite these fluctuations, recent estimates from Susquehanna and Bernstein paint a positive picture for TSM. Susquehanna, in its June 17 report, upgraded TSM to a ‘buy,’ raising its 12-month price target to $200. Meanwhile, Bernstein, on June 20, increased its TSM target from $150 to $200, citing expectations of surpassing third-quarter predictions and a forecasted 28% revenue rise for 2024.
Bernstein’s optimism stems from TSM’s fully utilized N3 and N5 capacities and the growing demand for its Chip-on-Wafer-on-Substrate (CoWoS) technology. This positive outlook reflects the dynamic landscape of the semiconductor industry and the pivotal role TSM plays within it.
Investors eyeing opportunities in this sector should consider the evolving landscape carefully, recognizing both the potential for substantial gains and the inherent speculative nature of investments.
