Analysts at both Bernstein and Susquehanna have revised their price targets for the Taiwan Semiconductor Manufacturing Company, with TSMC stock (NYSE: TSM) now holding a matching target at both. Following a detailed evaluation of the company's business prospects and technology advancements, both firms paint a bullish picture for the semiconductor giant and put in place $200 price targets.
Bernstein's target is a raise from the previous mark of $150, where the raise at Susquehanna was from a $180 prior target.
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Positive Outlook for 2024 and Beyond
Bernstein's ‘Outperform' rating and positive outlook is grounded in their expectation that TSMC will not only meet but exceed its 2024 guidance. This optimism is fuelled by the continued demand for high-9end phones and the adoption of advanced technology nodes. Furthermore, TSMC's revenue from AI applications in data centres is on the rise, staying on course with projections and indicating a healthy growth trajectory.
Looking forward to 2026, Bernstein anticipates an additional 26% increase in TSMC's Earnings Per Share (EPS), thanks to sustained demand for Chip on Wafer on Substrate (CoWoS) technology. Potential launches like Intel's Lunar Lake and anticipated price hikes in advanced nodes are poised to contribute to this growth. Even with a lower-than-anticipated outsourcing volume from Intel, TSMC's EPS is still expected to maintain a mid-teens percentage growth in 2026.
Susquehanna also noted wafer ASP's being a space where Taiwan Semi is dominating, with recent checks on the supply chain in Taiwan looking strong. The firm holds a ‘Positive' rating on TSM stock.
TSMC's strategic partnerships and production approaches also warrant attention. Despite Intel planning to move its compute tile back to its own process, TSMC is likely to retain some level of involvement in producing supporting tiles for Intel's Panther Lake.
The revised price targets and the optimistic projections by Bernstein and Susquehanna underscore the financial and strategic strength of TSMC in the semiconductor industry. With robust demand for its CoWoS technology, potential positive impact from Intel collaborations, and expected advanced node pricing power, TSMC appears well-positioned to continue its growth trajectory in the upcoming years.
