TSMC Stock Explodes to $210 — Is the AI Supercycle Enough to Drive NYSE:TSM to $310?
With 67.6% Foundry Share, $28B in Q2 Guidance, and 2nm Dominance, Can TSMC Keep Crushing Intel and Reach That $310 Target? | That's TradingNEWS
NYSE:TSM Powers Higher on 2nm Breakthrough and Market Share Gains
Taiwan Semiconductor Manufacturing Company (NYSE:TSM) continues to dominate the advanced semiconductor space, with a reported 39.6% year-over-year revenue growth in May 2025, bringing its total Jan–May growth to 42.6%. This resilience comes despite lingering global trade friction and geopolitical risk around Taiwan. Notably, TSM stock has surged from its April low of $141 to over $210—marking a nearly 50% gain in a matter of weeks.
TSMC's AI Capacity and Pricing Power Set It Apart from Rivals
Even as tech peers like NVIDIA (NASDAQ:NVDA) and Intel (NASDAQ:INTC) jockey for AI dominance, TSMC's foundry business has quietly become the backbone of AI chip production. The company has already secured over 90% yield rates on its cutting-edge 2nm node—well ahead of rivals—and controls more than 67.6% of the global foundry market as of Q1 2025. Samsung’s share, by contrast, has slipped to 7.7%. These figures highlight the strength of TSMC’s execution while competitors falter. With leading-edge chips comprising over 58% of revenue (36% from 5nm and 22% from 3nm), TSMC’s grip on AI capacity gives it pricing leverage as demand continues outstripping supply.
Geopolitical Diversification Strengthens the Silicon Shield
TSMC’s massive investment in overseas fabs—from Arizona to Japan and Germany—has become a key factor in reducing risk from potential Taiwan Strait tensions. Its Arizona facility has already begun pilot 4nm production, with 2nm ramping by 2028. In Japan, the Kumamoto fab now serves Sony and Toyota, while a $10 billion Dresden venture with Bosch and NXP will support EU automotive chip needs by 2027. This global diversification enhances what analysts call the “silicon shield,” broadening Western strategic interests in protecting Taiwan’s output.
Strong Financials Reinforce Long-Term Upside for NYSE:TSM
Q1 2025 revenue hit NT$839 billion (~US$25.53 billion), up 41.6% YoY. Net profit rose 60.3% to NT$361.6 billion (~US$11 billion), and gross margins held firm at 58.8%. Looking forward, TSMC expects Q2 revenue of US$28.4–29.2 billion with gross margins between 57–59%, underpinned by AI-driven demand. The company remains debt-light, cash-rich, and enjoys a dividend payout consuming just one-third of free cash flow. Capex for 2025–26 is projected at US$32–36 billion, funded largely from cash operations and CHIPS Act subsidies.
TSM Stock Valuation Still Looks Cheap Amid AI Supercycle
Despite the recent rally, NYSE:TSM trades at under 20x forward EPS for 2026 and only 11.28x EV/EBITDA. This is compelling versus Intel’s 15.17x EV/EBITDA despite weaker margins and less advanced nodes. TSMC’s 2025 revenue is forecast to rise 41.5% YoY, with 16.7% and 15.8% growth expected for 2026 and 2027, respectively. EPS growth also accelerates, supported by margin expansion from the 2nm node and high-value CoWoS packaging. At a median EV/EBITDA of 9x applied to 2026 projections, the stock could be worth over $310—more than 50% above current levels.
Insider Confidence and Strategic Moat Solidify Bullish Case
Investors should closely monitor TSMC insider transactions as management continues to show confidence in its AI roadmap. With 70–80% control of 5nm production, a dominant EUV equipment position via ASML, and scale unmatched by peers, TSMC enjoys an unassailable cost and technology moat. Even Intel’s 2024 High-NA EUV trial isn’t expected to yield volume parity with TSM until late 2026 or later.
Buy Rating: NYSE:TSM Poised for Structural AI-Driven Revaluation
Backed by 43% profit margins, a 67.6% global foundry share, and a fortress balance sheet, NYSE:TSM is structurally central to the AI supercycle. With shares trading at just 11x sales and under 20x 2026 EPS, the market continues to undervalue this compounder. For investors seeking AI exposure with margin resilience and geopolitical diversification, TSMC is a strong Buy with clear upside to $310 in the medium term.
