tsmc stock gets a boost: jefferies cites china risk advantage

2025-03-28 tsmc

New York, Friday, 28 March 2025.
taiwan semiconductor manufacturing company saw its stock rating jump from ‘hold’ to ‘buy’ at jefferies. the key reason? tsmc’s smaller footprint in the chinese market offers a safety net against geopolitical storms. while rivals face potential headwinds from trade restrictions, tsmc’s lower china exposure is now viewed as a strategic advantage. this shift in perspective is expected to positively influence investor confidence and the overall valuation of tsmc, whose dividend ex-date is june 12, 2025.

market reaction and tsmc’s valuation

The upgrade from Jefferies arrives amid a flurry of market activity and analyst adjustments [1][8]. On March 27, 2025, TSMC’s ADR (American depositary receipt) experienced a 3.03% dip, settling at $168.24 [4][5]. Simultaneously, the Dow Jones Industrial Index fell by 0.37%, and the Philadelphia Semiconductor Index decreased by 2.07% [4][5]. Despite this, TSMC maintains a substantial market capitalization of $858.84 billion, with an earnings per share (ttm) of $7.04 and sales of $90.03 billion [2]. The stock’s price-to-earnings ratio stands at 23.54, and analysts have set a target price of $248.76 [2].

geopolitical factors and tariff impacts

Geopolitical tensions and trade policies are significantly impacting market strategies [6]. HSBC has reduced its asset allocation for US and global stocks to neutral for the next six months, citing increased uncertainty from the tariff war [6]. The US is considering implementing reciprocal tariffs on April 2, a move to which Canada plans to respond [4][5][6]. Jefferies’ Chris Wood reduced TSMC’s weighting in his portfolio to invest in MakeMyTrip and other companies, highlighting a broader shift away from US investments [8]. These adjustments reflect concerns about the US economic outlook and the potential impact of tariffs [8].

analyst perspectives and strategic shifts

Analysts are actively recalibrating their investment strategies in response to evolving market conditions [7][8]. Chris Wood, global head of equity strategy at Jefferies, is advocating for selling rallies in US stocks and increasing exposure to Europe, China, and emerging markets [8]. HSBC anticipates the US unemployment rate to climb to 4.6% by the end of 2025, which may prompt the Federal Reserve to cut interest rates [6]. These perspectives suggest a cautious approach to US equities, with a focus on regions perceived to offer greater growth potential and stability amidst global trade uncertainties [6][8].

Bronnen

Stock Upgrade China Exposure