TSMC (TSM) Gets Price Target Hike as JPMorgan Sees Strong AI-Led Growth

Core Viewpoint - Taiwan Semiconductor Manufacturing Company Limited (TSMC) is positioned as a key player in the AI sector, with analysts projecting significant revenue growth driven by advanced technology and increasing demand for AI applications [1][2]. Group 1: Revenue Growth Projections - JPMorgan analyst Gokul Hariharan raised TSMC's price target to NT$2,100.00 from NT$1,700.00 while maintaining an Overweight rating [1]. - TSMC is expected to achieve 30% USD revenue growth in 2026, driven by rising demand for N3 technology, accelerating N2 ramp, stronger advanced packaging, and an increase in blended average selling prices (ASP) [2]. - For 2027, TSMC is projected to deliver over 20% revenue growth, supported by leading-edge capacity and sustained AI-driven capital spending [3]. Group 2: Margin and Capacity Insights - TSMC's gross margins are anticipated to improve due to a better product mix, higher yields from N3 technology, and increased expedited wafer orders on N4/N3 nodes [2]. - There are potential upside risks from stronger-than-expected gross margins in the first half of 2026, along with additional demand for N2 capacity into 2027 [3]. Group 3: Market Dynamics - A possible rebound in Nvidia H200 shipments could provide additional support for TSMC's growth, alongside potential increases in demand for mature technology driven by industrial and automotive sectors [3]. - The company manufactures advanced chips specifically for AI applications, highlighting its strategic importance in the technology landscape [4].