tsmc's price target leaps on ai boom
Taipei, Tuesday, 8 July 2025.
Macquarie has boosted its target price for tsmc by 14% to NT$1,282. This revision reflects strong confidence in tsmc’s future cash flow and valuation. Powering this optimism is the surge in demand from the artificial intelligence ‘supercycle’. Despite some uncertainty, the outlook for tsmc remains positive. The ai sector’s rapid expansion continues to drive growth.
stock performance and market position
TSMC’s stock closed at $229.17, a decrease of 2.40% [2]. The stock has experienced volatility, with a 52-week high of $237.58 and a low of $131.69 [2]. Macquarie’s increased target price indicates a positive outlook for TSMC, driven by sustained growth in the artificial intelligence sector [1]. Bank of America Securities has also raised its target price for TSMC’s us shares to $260, and the Taiwan share target price to NT$1,280, reiterating a ‘buy’ rating [5]. This reflects confidence in TSMC’s long-term structural benefits, despite short-term pressures on profit margins due to the appreciation of the New Taiwan dollar [5].
manufacturing capacity and expansion
Morgan Stanley anticipates that TSMC’s commitment to investing in its us facilities will likely lead to tariff exemptions, even with potential tariff impositions [3]. The ‘big and beautiful act’ in the us, which increases tax credits for semiconductor companies building capacity in the us to 35%, should alleviate some of the cost pressures TSMC faces while expanding in the us [3]. TSMC is also expected to expand its 2 nm production capacity to 90,000 wafers per month, exceeding some analysts’ expectations of 60,000 wafers [3]. TSMC’s capital expenditure is expected to remain steady at $40 billion in 2026 [3].
geopolitical considerations and tariff impacts
Potential tariffs could impact TSMC. Morgan Stanley suggests TSMC’s investments in us facilities could help secure tariff exemptions [3]. Concerns about potential tariffs from the us have led analysts to assess TSMC’s strategies for mitigating these risks [3]. These strategies include securing exemptions through us investments and adjusting pricing to offset tariff costs. TSMC is also positioned to potentially benefit from increased demand from china’s ai sector [3]. Any potential trade restrictions could shift demand dynamics, possibly favoring TSMC due to its advanced technology and manufacturing capabilities.
expert analysis and financial forecasts
Morgan Stanley forecasts a 20% year-over-year increase in TSMC’s us dollar revenue for 2026 [3]. This growth is attributed to a 30% to 40% annual increase in cloud ai semiconductor revenue and intel’s outsourcing of its novalake series cpu and gpu production to tsmc [3]. Bank of America analysts expect TSMC’s second-quarter revenue to reach $30.1 billion, surpassing guidance, with a gross profit margin of 57.1% [5]. They also anticipate a 7% to 9% increase in advanced process prices in 2026, which should offset foreign exchange-related cost pressures and aid in gross margin recovery [5].