Taiwan Semiconductor Manufacturing Co. (TSMC), a key chip supplier for Apple and NVIDIA Corp., is on the brink of joining the trillion-dollar club due to increasing demand for AI-related products and potential price hikes. TSMC’s market capitalization is approaching the trillion-dollar mark, driven by a surge in stock prices. Several Wall Street firms, including Goldman Sachs, JPMorgan Chase, Citigroup, and Morgan Stanley, have raised their price targets for TSMC. Goldman Sachs, in particular, is bullish on TSMC, anticipating an increase in manufacturing prices for three- and five-nanometer chips.
JPMorgan expects TSMC to raise its 2024 revenue guidance and boost capital spending as AI-related sales are projected to account for 35% of total revenue by 2028. TSMC’s growth has been fueled by the rising adoption of artificial intelligence and its role as a primary supplier of advanced chips to Nvidia, which recently became the world’s most valuable company.
Last week, TSMC surpassed Berkshire Hathaway to become the eighth largest company globally by market capitalization. The company’s US-listed ADRs have seen a 73% increase this year, pushing its market value close to the trillion-dollar mark. The surge in TSMC’s ADRs compared to its Taiwan stocks is attributed to the US’s growing interest in artificial intelligence.
Furthermore, the ARK Next Generation Internet ETF recently acquired a substantial number of TSMC shares amid the AI investment trend on Wall Street. Despite some warnings about Nvidia being in a “bubble territory,” TSMC continues to benefit from its strong position as Nvidia’s top supplier of advanced chips.
In summary, TSMC’s impressive growth and market performance are a result of the increasing demand for AI-related products and potential price increases for advanced chips. With several Wall Street firms raising their price targets for TSMC, the company is poised to reach the trillion-dollar mark soon. Investors are closely watching TSMC’s trajectory as it solidifies its position as a key player in the semiconductor industry.
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https://www.benzinga.com/news/24/06/39398879/key-apple-supplier-tsmc-follows-nvidia-footsteps-to-join-the-trillion-dollar-club