Taiwan Semiconductor's market cap has reached nearly one trillion dollars, surpassing Warren Buffett's Berkshire Hathaway, becoming the eighth-largest company in the world. This week, several Wall Street banks have raised their target price for Taiwan Semiconductor, expecting continued strong demand for AI-related needs. At the same time, in 2025, the cell manufacturing business of Taiwan Semiconductor may raise prices, which will help boost its business performance.
Under the push of the AI boom, Wall Street's bullish voices on the global chip foundry giant Taiwan Semiconductor are getting louder and louder.
Recently, the market cap of Taiwan Semiconductor has approached $1 trillion, surpassing Berkshire Hathaway of Warren Buffett and becoming the eighth largest company in the world.
Taiwan Semiconductor's market cap trend in the past three years
Wall Street banks are bullish on Taiwan Semiconductor
This week, many Wall Street banks have raised their target prices for Taiwan Semiconductor. It is expected that the strong demand for AI-related products and the possible price increase of Taiwan Semiconductor's chip foundry business in 2025 will help boost its performance.
The "price increase" speculated by Wall Street banks originated from the recent hints of Wei Zhejia, the new chairman of Taiwan Semiconductor.
"I did indeed complain to 'Mr. 3 Trillion' (referring to Huang Renxun, whose net worth is estimated by Taiwanese media to be NT $3 trillion) that his products are too expensive," Wei said. "I think these products are indeed valuable, but I am also considering showing (him) our value."
At the same time of the Computex Taipei, Huang Renxun, CEO of NVIDIA, also stated that he agreed that Taiwan Semiconductor should raise its prices to match the value it provides. This has also been interpreted as a signal confirming Taiwan Semiconductor's price increase.
Under this signal, many Wall Street banks are bullish on Taiwan Semiconductor. Among them, Goldman Sachs is one of the most optimistic bulls. This week, Goldman Sachs raised Taiwan Semiconductor's target price by 19% to 1160 Taiwan dollars (closing at 981 Taiwan dollars on Thursday), and predicted that Taiwan Semiconductor's 3nm and 5nm chip foundry prices are expected to increase by about 1%-5%.
JPMorgan Chase said that Taiwan Semiconductor may "raise its revenue guidance for 2024 and may increase its capital expenditure to the high end of the guidance range." JPMorgan Chase predicts that by 2028, the contribution of artificial intelligence to Taiwan Semiconductor's total revenue will reach 35%.
Recently, Citigroup and Morgan Stanley have also raised their target prices for Taiwan Semiconductor and expected its performance to be stronger.
Taiwan Semiconductor's value soars along with NVIDIA
As the leader of the wafer foundry industry, Taiwan Semiconductor has also made a lot of money from the AI trend in the past two years. For global investors, Taiwan Semiconductor is attractive not only because of its cutting-edge technology and relatively low valuation, but also because of its status as NVIDIA's major advanced chip supplier.
This week, NVIDIA officially became the world's highest market value company, surpassing Apple and Microsoft, marking the skyrocketing heat of artificial intelligence in the US stock market.
Calculated with Taiwan Semiconductor's American Depositary Receipts (ADR) listed in the United States, its market value has surpassed Berkshire Hathaway, becoming the eighth largest company in the world. Taiwan Semiconductor's ADR has risen by 73% this year, making its market value reach $932 billion, with only a 7% increase away from the $1 trillion threshold.
This Tuesday, Goldman Sachs analysts including Bruce Lu wrote in a report: "We now see that, as positive sentiment around artificial intelligence continues to grow, Taiwan Semiconductor's risk-to-reward profile offers even greater appeal...As the AI wave continues to diffuse, we view Taiwan Semiconductor as one of the major beneficiaries."