Taiwan Semiconductor Manufacturing Co (TSM) stock was lower today despite hopes that its AI revenues could quadruple by the end of the decade.
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Silicon Demand
Three-star TipRanks-rated analyst Charles Shi of Needham said in a note today that the Taiwan company’s AI revenue could increase from $26 billion in 2025 to $33 billion in 2026 and $46 billion in 2027. By 2029 it could reach as high as $90 billion.
Shi upped his price target on the stock from $225 to $270 with a Buy rating.
He said that silicon content growth is an increasingly important driver for TSMC’s AI revenue growth as will be demand for Rubin Ultra chips which it is making for semiconductor giant Nvidia (NVDA).
He added that the group’s overall revenue may grow from $114 billion this year to $130 billion in 2026 and $160 billion in 2027.
Few Competitors
“TSMC leads all competitors in both wafer process and advanced packaging technologies. We attribute the company’s success to its foundry business model,and note that the economies of scale in a high fixed-cost business like foundries favor the largest players, like TSMC,” Shi said. “We expect TSMC’s foundry business to strengthen as we do not foresee a competitive challenge for the next several years.”
However, he added that as the world enters a new era of superpower competition, he anticipates that TSMC will need to reduce the concentration of its manufacturing operation in Taiwan by building facilities outside the country and region.
Is TSM a Good Stock to Buy Now?
On TipRanks, TSM has a Strong Buy consensus based on 8 Buy and 1 Hold ratings. Its highest price target is $255. TSM stock’s consensus price target is $226 implying a 0.85% upside.
