TSMC Stock Target (NYSE:TSM) Raised to $330 on Capacity Increase

Taiwan Semiconductor Manufacturing's stock (NYSE:TSM) is trading 1.45% higher in the pre-market, following a series of upward revisions to its price targets, the latest of which came with a healthy $330 PT. This bullish trend is largely attributed to TSMC's strategic capacity expansions, particularly in chip-on-wafer-on-substrate (CoWoS) technology, and the escalating demand for AI and high-performance computing chips.

TSMC's stock has been delivering a solid year of outperformance, with a year-to-date increase of 46.2%, and the Street continues to support higher moves.

Bernstein has increased its price target on TSMC to $330 from $290, maintaining an “Outperform” rating. This revision is underpinned by TSMC's ambitious plans to boost its CoWoS capacity to 125,000 wafers per month by the end of 2026. This expansion is strategically timed to support the anticipated demands of Nvidia's upcoming Blackwell and Rubin projects slated for 2025 and 2026. Bernstein forecasts TSMC's revenue to grow by 23% in fiscal 2026 and 20% in 2027.

Other analysts are also echoing this positive sentiment. Morgan Stanley has raised its price target for TSMC to NT$1,588 from NT$1,388, citing robust artificial intelligence (AI) demand and stable foreign exchange rates. The firm anticipates TSMC will exceed its fourth-quarter 2025 revenue and gross margin guidance, driven by this demand. Morgan Stanley has also increased its CoWoS capacity assumption to 100,000 wafers per month by 2026, noting that Nvidia's Rubin chip could consume 3nm wafers, potentially leading to a 5% price hike in 3nm wafer prices in 2026.

Barclays has also joined the chorus, maintaining an “Overweight” rating on TSMC and raising its price target to $355 from $330. The firm highlights TSMC's strong third-quarter results and anticipates another strong year in 2026, driven by strengthening AI demand.

Bank of America Securities has also increased its price target for TSMC from $290 to $330, maintaining a “Buy” rating, citing improved pricing power and strong growth prospects for TSMC's advanced 2-nanometer technology, expected to contribute 9% of revenue in 2026. Bank of America has raised its earnings per share forecasts for TSMC by 8% for fiscal 2026 and 9% for fiscal 2027, projecting a 24% year-on-year revenue increase in 2026.

Capacity Constraints and Future Demand

Price Targets

Currently, TSMC's advanced-node manufacturing capacity falls approximately three times short of the current AI demand, even with ongoing capacity expansions in Japan, the U.S., and Europe. This shortfall underscores the critical need for increased production capabilities to meet the growing requirements of major clients like Nvidia, who are pushing the boundaries of AI development.

Nvidia has recently announced that its next-generation data center-grade GPU, codenamed Rubin, and CPU, named Vera, have successfully reached the tape-out stage and are now in fabrication at TSMC. This milestone confirms that their new AI platform is on track for release in 2026. The platform will feature the CX9 Super NIC, NVLink 144 scale-up switch, Spectrum X scale-out and scale-across switch, and a silicon photonics processor for co-packaged optics.

TSMC's proactive investments in capacity expansion and its strategic partnerships with industry leaders position it favorably in the rapidly evolving semiconductor landscape. While challenges remain in scaling production to fully meet the burgeoning AI demand, the company's commitment to innovation and its pivotal role in the global semiconductor supply chain continue to bolster investor confidence, potentially influencing the stock's future performance.