Goldman Sachs analyst Bruce Lu lifted his price target on Taiwan Semiconductor Manufacturing (TSM) to a new Street high of NT$2,330 from NT$1,720, implying 39.5% upside potential from current levels. The upgrade drove TSM shares to their highest levels since April 2025, hitting NT$1,695 in Taipei today, and a fresh 52-week NYSE high of $331.25.
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The top analyst raised his earnings estimates for 2026 and 2027 by up to 15%, citing a “multi-year growth engine” in artificial intelligence (AI). Lu believes that surging demand for AI tokens is growing exponentially, keeping chip demand ahead of supply.
Lu is a top analyst on TipRanks, ranking #1,313 out of 10,176 analysts tracked. He has a 69% success rate and an impressive average return per rating of 34.40%.
Lu Says 2026 Is ‘All About AI’
Lu views AI as a long-term growth driver for TSMC, highlighting rising profit margins despite the heavy capacity investments over three years. He projects TSMC to spend over $150 billion on capital expenditures from 2026 to 2028 to meet surging demand. This includes $54 billion in 2027 (up from the prior $50 billion estimate) as new fabs become operational.
Additionally, he believes that strong AI demand will keep TSMC’s 3nm/5nm wafer capacity tight through 2027. With expansions and efficiency gains, Lu forecasts 30% revenue growth in 2026 and 28% in 2027, up from his earlier estimates of 22% each year.
Moreover, Lu expects TSMC’s gross margins to exceed 60% from 2026 to 2028, despite elevated capex and overseas growth. This stems from limited dilution at foreign fabs and steady productivity gains. According to Lu, this combination of strong growth and sustained high gross margins supports a 9% to 15% upward revision in EPS forecasts for 2026 and 2027, with earnings per share topping NT$100 by 2027.
TSMC Shares Lead Asia Rally
Taiwan Semiconductor remains the world’s largest contract chip maker, entering the new year buoyed by strong optimism over ongoing AI demand. TSMC led a rally in Asian tech stocks today, as investors kept pouring money into AI despite overheating worries. The sector once again drove regional market gains regardless of volatility from recent U.S. strikes on Venezuela.
TSMC’s shares jumped about 44% in 2025, lifting its market cap over $1 trillion for the first time. This surge signals stronger investor trust in its key role during the AI boom, as global chipmakers like Nvidia (NVDA) and Apple (AAPL) depend on its foundry expertise.
Is TSMC Stock a Buy?
On TipRanks, Taiwan Semiconductor stock has a Strong Buy consensus rating based on six Buys and one Hold rating. The average Taiwan Semiconductor price target of $358 implies 12% upside potential from current levels.
