Key insights
- Bernstein raised its price target on TSM to $430, citing a strong AI-driven growth outlook with a 28% EPS CAGR over 2.5 years. They believe TSM's competitive moat remains strong despite potential competition from Intel and Samsung. The firm anticipates limited impact from potential Apple-Intel collaboration due to TSM's capacity-constrained sales and technological lead. This positive analyst action could boost investor confidence in TSM and the broader semiconductor sector.
Investing.com - Bernstein SocGen Group raised its price target on Taiwan Semiconductor Manufacturing (NYSE:TSM) to $430 from $351 on Monday while maintaining an Outperform rating.
The firm expects the company to deliver 28% earnings per share compound annual growth rate over the next 2.5 years. Bernstein set a price target of NT$2,780 based on 20 times one-year forward price-to-earnings ratio. The chipmaker currently trades at a P/E ratio of 30.77, though its PEG ratio of 0.68 suggests the stock remains attractively valued relative to its growth prospects. TSM posted revenue growth of 31% over the last twelve months.
The research firm said it does not expect potential collaboration between Apple and Intel to affect Taiwan Semi’s market position. Bernstein said Intel and Samsung Foundry may gain some business on geopolitical reasons or for mature nodes, but only in a limited capacity. InvestingPro data highlights TSM’s competitive moat with gross profit margins of 62%, and the platform offers 18 additional ProTips for investors evaluating the semiconductor leader.
The firm noted Samsung Foundry is improving on 4-nanometer or 2-nanometer processes, which are equivalent to Taiwan Semi’s 3-nanometer technology. Taiwan Semi is already mass-producing true 2-nanometer chips, according to Bernstein.
Bernstein said it sees no indication that Intel is narrowing the technology or cost gap with Taiwan Semi. The firm believes any potential production by Apple at Intel would be limited to small products and would not reduce Taiwan Semi’s revenue, as the company’s sales are constrained by capacity.
In other recent news, Taiwan Semiconductor Manufacturing Co. (TSMC) reported its first-quarter 2026 financial results, with consolidated revenue reaching NT$1,134.10 billion and net income at NT$572.48 billion. The board also approved a cash dividend and a substantial capital injection of US$20 billion into its U.S. subsidiary. Additionally, TSMC announced April 2026 revenue of NT$410.73 billion, marking a 17.5% increase from April 2025, and total revenue for the first four months of 2026 was NT$1,544.83 billion, up 29.9% compared to the previous year.
TSMC’s board of directors has approved capital appropriations totaling $31 billion, with a focus on advanced node capacity expansion. Bank of America analysts have raised their capital expenditure forecast for TSMC to $75 billion for 2027, citing increased chip demand. In a strategic move, TSMC plans to sell up to 152 million shares of Vanguard International Semiconductor, reducing its stake to approximately 19%. Moreover, TSMC and Sony Semiconductor Solutions have signed a non-binding memorandum of understanding to form a joint venture for developing next-generation image sensors.
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