Key Points TSMC’s accelerating AI demand has improved long-term visibility for its foundry business. The company is expanding its CoWoS packaging capacity. TSMC can continue to witness even more share price gains in 2026. 10 stocks we like better than Taiwan Semiconductor Manufacturing › Taiwan Semiconductor Manufacturing's (NYSE: TSM) shares are already up by over 40% in 2025, but several Wall Street analysts believe that the rally may not be over. The most bullish among them is Susquehanna analy ...

Company Overview - Taiwan Semiconductor Manufacturing Company Limited (TSM) has a current share price of around $228 and is experiencing strong performance due to the rising demand for artificial intelligence (AI) and the recovery in semiconductor stocks [1] - TSM is a dominant player in the semiconductor industry, controlling approximately two-thirds of the global third-party market and manufacturing chips for major AI companies like Nvidia, AMD, and Broadcom [3] Financial Performance - TSM reported first-quarter 2025 earnings of $2.12 per share, surpassing the Zacks Consensus Estimate of $2.03, resulting in an earnings surprise of 4.4% [4] - The company achieved revenues of $25.5 billion, exceeding the Zacks Consensus Estimate of $25.3 billion [4] - TSM's AI-chip business is projected to double in 2025, with annual AI-specific revenues expected to reach around $20 billion [5] Market Position and Growth - TSM is not only benefiting from a cyclical upswing in the semiconductor market but is also central to the structural transformation in computing driven by AI [5] - The company's CoWoS packaging margins exceed 60%, largely due to demand from AI and high-performance computing [5] - Year to date, TSM has grown 15.8%, outperforming its Zacks Peer Group, which advanced by 13.4% [7] Challenges and Risks - TSM faces headwinds from geopolitical tensions, particularly between the U.S. and China, and has allocated about $18 billion to hedge against Taiwan-dollar volatility [6] - Cybersecurity threats and supply-chain nationalization efforts pose additional risks as TSM expands its manufacturing facilities in the U.S., Japan, and Germany [6] Strategic Outlook - TSM is viewed as a backbone of AI infrastructure, with a long runway for growth as it supplies chips for various applications, including generative AI and AI-powered smartphones [8] - The company maintains a Zacks Rank 2 (Buy), indicating positive market sentiment towards its future performance [7]