From Nasdaq: 2024-06-19 08:41:55

NVIDIA has become the most valuable company in the U.S. with a market capitalization of $3.34 trillion, but it’s not the only semiconductor player thriving. Taiwan Semiconductor, a major chip manufacturer, is benefiting from NVIDIA’s strong business as one of its top customers.

Taiwan Semi’s key role in the semiconductor value chain cannot be overstated. Top tech giants like NVIDIA, Apple, AMD, and Qualcomm are all customers of TSM. The increasing demand for AI technology is also driving TSM’s success, with a recent 30% surge in May revenues.

With the rise of AI in various tech products, there is a potential for a tech product replacement cycle that could further boost Taiwan Semi’s long-term growth prospects.

Analysts are bullish on Taiwan Semi, with a nearly 75% increase in share price in the past year. Susquehanna’s Mehdi Hosseini reiterated a Buy rating on TSM with a target price increase to $200. Bank of America Securities’ Brad Lin also remains optimistic about TSM’s future.

The Street has a Strong Buy consensus rating on Taiwan Semi, with an average price target of $170.33. However, TSM’s price-to-earnings multiple of 33.7 suggests that the stock may not be cheap at current levels.



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