10 AI Stocks Investors Are Watching Closely

3. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)

Number of Hedge Fund Holders: 194

Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is one of the 10 AI Stocks Investors Are Watching Closely. On January 7, JPMorgan analyst Gokul Hariharan raised the price target on the stock to NT$2,100.00 (from NT$1,700.00) while maintaining an Overweight rating.

The firm anticipates 2026 to be another strong year for TSM, forecasting 30% USD revenue growth. Key drivers of this revenue growth include rising N3 demand, accelerating N2 ramp, stronger advanced packaging, and an uptick in blended ASP.

The firm also anticipates TSMC’s gross margins to improve, driven by better mix, higher N3 yields, accelerating expedited wafer orders on N4/N3 nodes, and encouraging TWD exchange rates.

JP Morgan also anticipates 2027 to deliver 20+% revenue growth for TSMC, supported by leading-edge capacity and sustained AI-driven capital spending. It also sees upside risks from stronger-than-expected gross margins in first half of 2026, additional upside in N2 capacity and demand into 2027.

The firm also pointed to a possible rebound in Nvidia H200 shipments, and potential upside in mature technology in case industrial and automotive demand increases.

Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) manufactures and sells advanced chips used in artificial intelligence applications.