TSMC Stock Target Raised As Goldman Adjusts Earnings Forecast

Taiwan Semiconductor Manufacturing (TSM) is seeing renewed bullish sentiment as Goldman Sachs revised its price target upwards, citing strong AI-driven demand. The stock, trading on the NYSE, reflects this optimism, currently priced at $329.56 in the pre-market, 3.11% higher.

TSMC's stock had already been on an upward curve, with Friday's gain of 5.17% also delivering fresh all time highs in the name. Sentiment has been given a further boost following Goldman Sachs' decision to increase its price target to NT$2,330 from NT$1,720, reaffirming a “Buy” rating. The stock currently trades at NT$1,670, indicating a perceived upside of 39.5% from here.

This adjustment is underpinned by expectations of sustained capacity tightness and robust demand, largely propelled by advancements in artificial intelligence technologies. The markets are responding positively to the anticipation that exponential growth in AI-related computing will sustain silicon demand ahead of supply well into 2027.

Goldman Sachs estimates that TSMC will allocate upwards of $150 billion in capital expenditures between 2026 and 2028. This investment is aimed at meeting the structural demand anticipated in the semiconductor industry. The firm projects continued tightness in 3-nanometer and 5-nanometer wafer capacity throughout 2026 and 2027, further supporting the upward revision of earnings estimates. Correspondingly, Goldman Sachs has increased the company's 2026 and 2027 earnings estimates by up to 15%, reflecting confidence in TSMC's growth trajectory.

The positive sentiment surrounding TSMC is further bolstered by similar assessments from other financial institutions. Morgan Stanley also raised its price target for TSMC to NT$1,588 from NT$1,388, citing robust AI demand, stable foreign exchange rates, and the company's pricing power. Morgan Stanley anticipates that TSMC will surpass its fourth-quarter 2025 revenue and gross margin guidance, attributing this to strong AI demand and stable foreign exchange conditions. The firm has also revised its 2026 and 2027 earnings estimates upward by 10% and 14.8%, respectively, and projects a 33% year-on-year revenue increase in 2025, with a gross margin of 58.5%.

The combined impact of these factors suggests a favorable outlook for TSMC's financial performance in the coming years. TSMC's strategic positioning in the AI and high-performance computing sectors, coupled with substantial investments in advanced manufacturing nodes and packaging services, positions the company to capitalize on the growing demand for AI technologies. Anticipated price increases, driven by tight supply and limited competition, further contribute to the bullish sentiment.