THE bullish chorus on Taiwan Semiconductor Manufacturing Co (TSMC) is growing even louder as a stock rally puts its market capitalisation one step closer to the US$1 trillion milestone.
TSMC overtook Berkshire Hathaway last week to become the eighth-largest company globally in terms of market capitalisation, based on the firm’s US-listed American depositary receipts (ADRs). The 73 per cent gain of the ADRs this year has boosted the firm’s market value to US$932 billion, shy of the US$1 trillion threshold.
The foundry sector leader has emerged as a major beneficiary of the widening adoption of artificial intelligence (AI), with its cutting-edge technology and valuation making it a favourite play among global investors.
TSMC has also prospered from being the main advanced-chip supplier of Nvidia – recently crowned the world’s most-valuable company.
Wall Street brokerages have lifted their price targets for TSMC this week, citing surging AI-related demand and potential price hikes in 2025 to drive up earnings.
JPMorgan Chase raised its AI revenue estimate to 35 per cent of total sales by 2028 while Citigroup lifted its price target by 12 per cent on a stronger earnings outlook.
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Goldman Sachs Group sees three- and five-nanometre chip manufacturing prices advancing by a “low single-digit percentage,” and increased its 12-month price target by 19 per cent to NT$1,160 (S$48.4).
“We now see even more attractive risk-reward for TSMC amid the growing, positive sentiment around AI,” Goldman analysts including Bruce Lu wrote in a note on Tuesday (Jun 18). “With the ongoing proliferation of AI, we see TSMC among the key beneficiaries.” BLOOMBERG
