Taiwan Semiconductor Manufacturing Corporation (TSM) saw its June revenue climb 39%, beating expectations. The company has thrived as stock investors have piled into leading AI-focused tech companies. In the last six months, TSMC’s stock has risen over 10%. Along with benefiting from the AI boom, the company has also thrived after announcing five new factories coming to the US.
In June, TSMC Chief Executive Officer C.C. Wei told shareholders that AI chip demand still outstripped supply, and reaffirmed an outlook for 2025 sales to grow in the mid-20% range in US dollar terms. Taiwan Semiconductor Manufacturing has pledged to spend another $100 billion ramping up manufacturing in Arizona, in addition to an expansion in Japan, Germany, and in native Taiwan.
Should You Buy TSM Stock Now: Wall Street Answers
While Nvidia has been the dominant force in AI thanks to Blackwell, TSMC remains the world’s largest contract chipmaker, with its ties to Apple playing a huge role. Wall Street expects the gains for the semiconductor developer to continue, with analysts outlining a clear path to $90 billion in AI-driven sales by 2029.
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Needham analyst Charles Shi upgraded his price target for TSMC stock to $270 from $225, maintaining a “Buy” rating on the world’s largest contract chipmaker. His analysis suggests that TSMC can achieve its ambitious AI revenue target without requiring dramatic volume increases, instead relying on higher silicon content per package and custom high-bandwidth memory solutions. Furthermore, while Shi warns of potential headwinds in 2026 due to slower AI accelerator volumes, he projects a strong recovery with nearly 40% growth in 2027 and 45% in 2028.
Looking ahead, gross margins are expected to face pressure from overseas facility startup costs, with an anticipated decline from 58.8% to approximately 58% in the second quarter. Nevertheless, Taiwan Semiconductor maintained its full-year revenue growth forecast of approximately mid-20%, underscoring its confidence in sustained AI demand. The company is expected to increase sales from $87.88 billion in 2024 to $170.3 billion in 2027.