Taiwan Semiconductor Manufacturing Corporation (TSM) fell below expectations, with revenues rising 39% in June. The company is thriving as stock investors stack up on high-tech companies focusing on major AI. Over the past six months, TSMC’s shares have risen by more than 10%. In addition to the bounty of the AI boom, the company thrived after unveiling five new factories coming to the US.
In June, TSMC CEO CC Wei told shareholders that demand for AI chips is still above supply, reaffirming its prospects for 2025 sales to rise in the 20% medium term range on the US dollar terms. Taiwanese semiconductor manufacturing has pledged to spend an additional $100 billion increase in manufacturing in Arizona, along with expansion in Japan, Germany and native Taiwan.
You need to buy TSM stocks now: Wall Street answers
Nvidia was the dominant AI force thanks to Blackwell, but TSMC remains the world’s largest contract chip maker with its relationship with Apple playing a major role. Wall Street hopes semiconductor developers will continue, with analysts outline a clear path to $90 billion in AI-driven sales by 2029.
Needham analyst Charles Sea upgraded the price target for TSMC stock from $225 to $270, maintaining the “buy” rating of the world’s largest contracted chip maker. His analysis suggests that TSMC can achieve ambitious AI revenue targets without the need for dramatic volume increases. Additionally, Shi warns of potential headwinds in 2026 due to slower amounts of AI accelerators, but forecasts a strong recovery in 2027 with a growth rate of nearly 40%.
Going forward, the total margin is expected to face pressure from startup costs at overseas facilities, which is expected to fall from 58.8% to about 58% in the second quarter. Nevertheless, Taiwan Semiconductor maintains its annual revenue growth forecast of around 20%, highlighting its trust in sustained AI demand. The company is expected to increase sales from $878.8 billion in 2024 to $170.3 billion in 2027.
