Bank of America (BAC) has reiterated its Buy rating on Taiwan Semiconductor Manufacturing Co. (TSM) stock following the conclusion of U.S. President Donald Trump’s trip to China.
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Explore NVDS for 2X short leverage on NVDAAnalyst Haas Liu writes in a note to clients that competitive fears surrounding Taiwan Semiconductor’s foundry dominance are overblown. The analyst adds that investors should not be preoccupied with Taiwan’s independence after Trump discussed the matter with Chinese President Xi Jinping.
As a result, Liu reiterated a Buy rating on TSM stock with a price target of 2,560 Taiwan dollars, saying the bank believes “recent concerns are overdone.” The analyst also likes TSMC’s scale and technological lead in advanced nodes, which are continuing to widen versus its rivals.
Taiwan Semiconductor’s Competitive Advantage
Taiwan Semiconductor remains the world’s largest microchip foundry, producing about three-quarters (75%) of all the microchips and semiconductors in the world today. It’s a highly specialized business that is hard to replicate and gives TSMC, as the company is known, a durable competitive advantage.
Taiwan Semiconductor recently reported a 58% increase in its first-quarter profit as global demand for its artificial intelligence (AI) microchips remains strong. The company makes chips used in products ranging from consumer electronics to data centers, and counts companies such as Nvidia (NVDA) and Apple (AAPL) among its many customers.
Is TSM Stock a Buy?
Taiwan Semiconductor’s stock has a consensus Strong Buy rating among six Wall Street analysts. That rating is based on five Buy and one Hold ratings issued in the last three months. The average TSM price target of $465 implies 15% upside from current levels.
