In the wave of AI, TSMC's US stock price has risen by more than 76% year-to-date. Last week, TSMC surpassed Warren Buffett's Berkshire Hathaway to become the eighth largest company in the world by market value. This week, TSMC's stock price hit a new high, approaching a market value of nearly $1 trillion.
As it is about to enter the &#34;trillion-dollar club,&#34; this week, Goldman Sachs, J.P. Morgan, and other Wall Street brokerages have raised their target prices for TSMC. They believe that the surge in AI-related demand and potential price increases by the company in 2025 will boost TSMC's profits.
Goldman Sachs is the most optimistic about TSMC's prospects, raising its target price for TSMC by 19% to NT$1160, with expectations that the prices for the company's 3-nanometer and 5-nanometer chip manufacturing will increase by &#34;low single-digit percentages.&#34;
J.P. Morgan stated that TSMC may raise its revenue outlook for 2024 and could also increase capital expenditures to the high end of the guidance range. J.P. Morgan expects that by 2028, artificial intelligence will account for 35% of TSMC's total sales.
TSMC previously stated that it expects capital expenditures in 2024 to be between $28 billion and $32 billion, with a potential increase to $35 billion to $40 billion in 2025, mainly for the research and production of 2/3-nanometer technology.
Recently, both Citigroup and Morgan Stanley have also raised their target prices for TSMC. Both investment banks believe that with the rapid development of AI technology and the expanding applications, TSMC will benefit from the chip demand for data centers and edge AI, especially in more advanced 2/3-nanometer technology nodes.
Citigroup predicts that by the end of 2025, most AI GPUs globally will migrate to 3-nanometer technology, bringing more orders to TSMC, with tight utilization expected to continue next year for its 3-nanometer technology. TSMC expects to receive more 3-nanometer chip orders in 2025, especially from customers like Apple, Qualcomm, and MediaTek.
Moreover, Morgan Stanley analyst Charlie Chan's research team released a report on June 5, predicting that TSMC may raise wafer prices by 5% in 2025 to maintain its gross margin at 53% or above, and mentioned that if NVIDIA accepts the price increase, other key AI customers may follow suit.
In the AI wave, as the main chip foundry for tech giants, TSMC has reaped significant rewards. Goldman Sachs analyst Bruce Lu stated, &#34;With the continuous development of artificial intelligence, we believe TSMC is one of the main beneficiaries.&#34;
AI chip orders remain high, with TSMC achieving strong sales growth in May. The company's sales in May were NT$229.62 billion (approximately US$7.114 billion), a year-on-year increase of 30.1%. From January to May this year, TSMC's cumulative sales reached NT$1.06 trillion (approximately US$32.839 billion), a year-on-year increase of 27%.
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Liu Deyin, the former chairman of TSMC, stated at the shareholders' meeting that the demand for AI is expected to be more optimistic than a year ago. With the increasing application of AI and higher requirements for chips, TSMC is confident in its future growth

As they are about to enter the "trillion-dollar club," Goldman Sachs, JP Morgan, and others have raised their target price for Taiwan Semiconductor. They believe that the surge in AI demand and price expectations will boost the company's profits

In the midst of the AI wave, TSMC's stock price in the US has surged over 76% this year, surpassing Warren Buffett's Berkshire Hathaway to become the eighth largest company globally by market capitalization. Analysts from Goldman Sachs, J.P. Morgan, Citigroup, and Morgan Stanley have raised TSMC's target price, citing increased demand for AI-related products and potential price hikes in 2025.
Goldman Sachs is particularly bullish on TSMC, raising the target price by 19% to NT$1160, anticipating single-digit percentage increases in chip manufacturing prices for 3nm and 5nm technologies. J.P. Morgan suggests TSMC may raise its 2024 revenue outlook and increase capital expenditure towards the higher end of the guidance range, with AI contributing 35% to total sales by 2028.
TSMC plans to significantly increase capital expenditure for R&D and production of 2/3nm technology, with estimates ranging from $280-320 billion in 2024 to potentially $350-400 billion in 2025. Analysts foresee TSMC benefiting from the expanding AI chip demand in data centers and edge AI applications, especially in the more advanced 2/3nm nodes.
Citigroup and Morgan Stanley have also raised TSMC's target price, projecting a shift to 3nm technology for most AI GPUs by the end of 2025, driving more orders to TSMC. Analysts anticipate tight capacity for 3nm technology next year and expect increased orders from key clients like Apple, Qualcomm, and MediaTek.
Morgan Stanley's analyst team, led by Charlie Chan, predicts a potential 5% wafer price increase by TSMC in 2025 to maintain a gross margin of 53% or higher, suggesting other AI clients may follow suit if Nvidia accepts the hike. TSMC's strong sales growth in May, with revenues reaching NT$229.62 billion (approximately $7.14 billion), reflects the high demand for AI chips and solidifies its position as a major beneficiary in the AI industry.

TSMC's market value approaches $1 trillion! Wall Street unanimously bullish