Wall Street sets TSMC stock price for the next 12 months

If you have a device with a microchip – whether it be a computer, a data center, a smartphone, or any other similar tool – it is more likely than not that a Taiwanese firm manufactured the critical component. Even more impressively, it is also more likely than not that it was made by the Taiwan Semiconductor Manufacturing Company (NYSE: TSM).

Indeed, TSMC is the dominant player in the industry and holds more than half of the global market. Additionally, this trend is unlikely to change as the foundry recently expanded its production to Japan and the U.S. with some success. For example, the Arizona plant’s yields are now reportedly ahead of those in Taiwan.

TSMC’s strength is also exemplified by the company’s 2024 stock market performance. Specifically, TSM shares are up 90.18% in the year-to-date (YTD) chart to their price today of $193.09. Still, the stock remains subject to broader market trends as evidenced by the 24-hour 2.03% drop together with most U.S. shares and indices.

TSMC stock price drivers in 2024

Elsewhere, there is indication that the semiconductor foundry has plenty of room for growth, given that it reported strong third-quarter (Q3) earnings earlier in October and explained that it is expecting demand to grow in 2025, in large part due to the continuation of the artificial intelligence (AI) boom.

The bull case has recently been bolstered by the CEO of Nvidia (NASDAQ: NVDA), who has taken responsibility for a now-fixed flaw in the Blackwell chip. Some media outlets have previously blamed the Taiwan Semiconductor Manufacturing Company for the issue.

Another high-profile dispute that recently came to light – the one stemming from Intel (NASDAQ: INTC) CEO’s ‘rude’ comments about Taiwan – did not have as amicable a resolution, though the negative impact of the American company losing the 40% manufacturing discount was far more evident in INTC stock’s performance by press time on November 1.

Analysts overwhelmingly rate TSMC stock as a ‘buy’

All things considered, TSMC’s business and stock market performance ensure that the shares’ overall analyst rating – recorded as ‘strong buy’ on TipRanks on November 1, 2024 – is hardly surprising.

Though TSM stock has relatively few expert assessments, all five represented analysts consider it a ‘buy.’ The average price target is likewise bullish as it stands at $205 – 7.59% above the latest closing price.

Still, it is noteworthy that, despite the positive ratings, the lowest 12-month price target represents a substantial downside at $150.

On the other hand, considering the most recent revisions, it is likely the low forecast is more outdated than genuinely bearish.

On October 18, Susquehanna reiterated its ‘buy’ rating for TSM shares, while one day earlier, on October 17, Needham did the same while confirming the $210 price target.

The most recent forecast – provided by Barclays on October 23 – updated the stock price prediction from $200 to $215 and confirmed TSMC is ‘overweight’ – a strong buy.

Featured image:

Postmodern Studio. Taiwan Semiconductor Manufacturing TSMC company logo on website page close-up on screen. Digital image. Los Angeles, California, USA – 20 March 2020. Shutterstock, April 3, 2020. Date retrieved: November 1, 2024.