TSMC Rockets Higher as AI Chip Boom Turbocharges Outlook

TSMC ( (TSM) ) has risen by 8.44%. Read on to learn why.

TSMC shares climbed 8.44% over the past week as investors reacted to bullish analyst calls and powerful signs of sustained demand from the AI and high‑performance computing cycle. Aletheia Capital’s Stefan Chang raised his price target on TSMC from $500 to a street‑high $600 and kept a Buy rating, framing the chipmaker as a high‑conviction pick in the firm’s “Alpha Generation” portfolio. The higher target implies significant further upside, reinforcing already strong market optimism around the stock.

Behind that optimism is an aggressive expansion roadmap. Chang highlights that TSMC is accelerating capacity build‑outs for its most advanced manufacturing nodes, expanding CoPoS packaging, and pushing faster growth in its SoIC 3D‑stacking technology. Much of this new capacity is due to come online in 2027–2028 and could drive another powerful leg of revenue growth on top of an already projected 30%‑plus annual growth rate between 2024 and 2027. The analyst even sees 2028 profits reaching nearly three times 2025 levels, supported by planned investments of roughly $220–$230 billion from 2026 to 2028, which TSMC is expected to fund through strong cash generation while still rewarding shareholders.

TSMC’s latest numbers and guidance further fueled the rally. First‑quarter 2026 revenue jumped 35.1% year over year to NT$1.134 trillion, signaling robust chip orders, especially for AI‑related CPUs and GPUs. That strength has been read as a positive demand signal across the semiconductor and broader tech sector, helping sentiment recover after a volatile period for AI‑linked stocks. With Wall Street maintaining a Strong Buy consensus on TSMC and expecting additional revenue growth of 8–10% quarter‑over‑quarter alongside healthy mid‑60% gross margins, traders have been quick to price in a stronger long‑term growth story, driving this week’s 8.44% surge in the stock.