Taiwan Semiconductor Manufacturing Co. TSM, a key chip supplier of Apple and Nvidia Corp. is on the brink of becoming a member of the trillion-dollar club, propelled by the rising demand for AI-related products and potential price increases.
What Happened: TSMC’s market capitalization is nearing the $1 trillion mark, fueled by a stock rally. A number of Wall Street brokerages, including Goldman Sachs Group Inc., JPMorgan Chase & Co., Citigroup Inc. and Morgan Stanley have raised their price targets for TSMC this week, Bloomberg reported on Friday.
Goldman Sachs has been the most bullish, increasing its price target by 19% to NT$1,160 ($35.81) in anticipation of a rise in three- and five-nanometer chip manufacturing prices.
JPMorgan anticipates that TSMC may “lift its 2024 revenue guidance and potentially move up its capex to the higher end of the guidance range,” expecting AI to account for 35% of total sales by 2028.
TSMC has benefited from the growing adoption of artificial intelligence and its position as the primary advanced-chip supplier of Nvidia, which recently became the world’s most valuable company at $3.3 trillion.
Last week, TSMC overtook Berkshire Hathaway Inc. to become the eighth-largest company globally in terms of market capitalization. The company’s U.S.-listed ADRs have seen a 73% gain this year, pushing its market value to $932 billion, just shy of the $1 trillion threshold.
Why It Matters: The surge in TSMC’s American depositary receipts over its Taiwan stock to a 15-year high this quarter is attributed to the U.S.’s growing enthusiasm for artificial intelligence.
Moreover, the ARK Next Generation Internet ETF fund acquired 3,316 shares of TSMC amid an ongoing AI frenzy sweeping Wall Street.
Despite market expert Craig Johnson‘s warning flags about Nvidia being in “Bubble-ish Territory,” TSMC continues to benefit from its position as Nvidia’s primary advanced-chip supplier.
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This story was generated using Benzinga Neuro and edited by Pooja Rajkumari
