TSMC Nears $1 Trillion Valuation as Target Upgrades Boost Rally

(Bloomberg) — The bullish chorus on Taiwan Semiconductor Manufacturing Co. is growing even louder as a stock rally puts its market capitalization one step closer to the $1 trillion milestone.

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TSMC overtook Berkshire Hathaway Inc. last week to become the eighth-largest company globally in terms of market capitalization, based on the firm’s US-listed ADRs. The depository receipts’ 73% gain this year has boosted the firm’s market value to $932 billion, shy of the $1 trillion threshold.

The foundry sector leader has emerged as a major beneficiary of the widening adoption of artificial intelligence, with its cutting-edge technology and valuation making it a favorite play among global investors. TSMC has also prospered from being the main advanced-chip supplier of Nvidia Corp. – 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 & Co. raised its AI revenue estimate to 35% of total sales by 2028 while Citigroup Inc. lifted its price target by 12% on a stronger earnings outlook.

Goldman Sachs Group Inc. sees three- and five-nanometer chip manufacturing prices advancing by a “low single digit percentage,” and increased its 12-month price target by 19% to NT$1,160.

“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. “With the ongoing proliferation of AI, we see TSMC among the key beneficiaries.”

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