TSM Stock Price Forecast – Taiwan Semiconductor Rides AI Boom Toward $275

NYSE:TSM Stock Performance and Market Position

Taiwan Semiconductor Manufacturing Company (NYSE:TSM) has risen to become the most critical foundry in global technology supply chains. Trading at $240.57 with a +2.28% daily gain, the company is nearing its 52-week high of $248.28. The stock’s market capitalization now stands at $1.248 trillion, supported by strong momentum in AI, high-performance computing, and advanced chip demand. Its beta of 1.20 shows exposure to broader market swings, yet TSM continues to outperform major indices.

Earnings Growth and Revenue Strength for NYSE:TSM

In Q2 2025, TSM reported revenue of $31.67 billion, up 54% year over year, and net profit of $9.2 billion, a 60% increase. Gross margin expanded to 58.6%, highlighting TSM’s ability to command premium pricing even while CapEx surged. Management raised full-year guidance to 30% growth, compared with 20% previously, with 60% of revenue now from HPC and AI workloads. Monthly revenue data confirms consistent strength, growing as much as 48% YoY in early 2025, before moderating to 25.8% in July.

AI Demand and Advanced Node Expansion

TSMC dominates the AI supply chain, producing the cutting-edge chips that power Nvidia, AMD, and Apple. 3nm processes contribute 24% of wafer revenue, while the roadmap to 2nm and beyond is supported by annual CapEx of $38–42 billion in 2025, up from $29.8 billion in 2024. AI-related revenue tripled in 2024 and is set to double again in 2025. To protect margins, TSM has announced 5–10% price hikes on N5, N4, and N3 nodes beginning in 2026.

Valuation Metrics and Analyst Targets for TSM

At current prices, NYSE:TSM trades on a P/E of 26.56, forward P/E of 21.01, and EV/EBITDA of 11.46. Its PEG ratio of 1.26 confirms valuation is attractive relative to projected EPS growth. Analysts set an average target of $274.16, with bullish calls as high as $306. Compared to ASML, which trades at richer multiples, and Intel, which lags technologically, TSMC remains undervalued given its leadership position.

Profitability and Balance Sheet Resilience

Trailing twelve-month results show $116 billion USD in revenue, net income of $49 billion USD, and an operating margin of 49.63%. Free cash flow reached $694.67 billion TWD, while the company maintains $2.63 trillion TWD cash reserves and modest debt with a 21.94% debt-to-equity ratio. TSM’s profitability—42.48% net margin and 34.20% return on equity—keeps it ahead of most semiconductor peers.

Dividends and Shareholder Returns from NYSE:TSM

TSMC pays a forward dividend of $3.34 per ADR, yielding 1.42%, with a payout ratio of 30.5%. The next ex-dividend date is September 16, 2025, with payment scheduled in January 2026. The company avoids heavy dilution, keeping its share count stable while prioritizing CapEx for capacity expansion. Investors benefit from both income and structural growth.

Geopolitical Pressures and U.S. Tariffs

TSMC faces structural risks from U.S.–China tensions. Washington has imposed fresh restrictions on chip equipment for China, affecting operations in Nanjing. Former President Trump has warned of “substantial tariffs” on semiconductors produced outside the U.S., though exemptions are in place until 2026. To mitigate risk, TSM is diversifying capacity, with fabs in Arizona and Japan expected to account for 30% of 2nm+ output by 2027.

Competitive Position Against Global Peers

Intel’s CFO recently admitted that the company will rely on TSMC “forever,” with 30% of Intel’s silicon already produced by TSMC. This dependence underscores the gap between TSM and U.S. rivals. Nvidia, AMD, and Broadcom dominate chip design but rely on TSMC for manufacturing. Even ASML, the monopoly provider of EUV lithography tools, cannot match TSM’s execution in production scale.

Growth Forecast and Stock Outlook for NYSE:TSM

Analysts expect EPS of $9.81 in 2025, climbing to $11.31 in 2026, with revenues projected to rise from 3.65T TWD to 4.22T TWD. That equates to 15%+ annual growth, outpacing the S&P 500. Over the last year, NYSE:TSM returned 51.76%, while the Taiwan index gained just 15.61%. Three-year gains stand at 213.39%, cementing TSM as one of the best-performing semiconductor equities.

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