Bernstein Reiterates Outperform on TSMC (TSM), Citing Strategic Chip Role

Taiwan Semiconductor Manufacturing Company Ltd (NYSE:TSM) is one of the best growth stocks to buy according to analysts. On August 15, Bernstein reiterated its Outperform rating on Taiwan Semiconductor Manufacturing Company Ltd (NYSE:TSM), with a price target of $249.00. That represents an implied upside of only 4.1% from the current price of $239.1.

Bernstein Reiterates Outperform on TSMC (TSM), Citing Strategic Chip Role

A close-up of a complex network of integrated circuits used in logic semiconductors.

However, Bernstein cited the Taiwanese company’s strategic importance in the global semiconductor landscape, emphasizing that it accounts for roughly 15–25% of the worldwide wafer fab equipment (WFE) market. That is massive, especially considering the whole of  China’s share of 30–40%.

Bernstein also cited that a significant share of the company’s capital expenditures is allocated beyond just traditional wafer fabrication. According to the firm, TSMC is increasingly investing higher amounts in infrastructure, packaging, and testing technologies. These are critical components in advanced chip production.

Last month, the company delivered a stellar Q2 2025 performance, with revenue climbed to NT$933.79 billion (US $30.07 billion), up 38.6 % year-over-year; while net income reached NT$398.27 billion (about US $13.53 billion), and diluted EPS came in at NT$15.36 (US $2.47 per ADR), a whopping 60.7 % jump year-over-year.

While we acknowledge the risk and potential of TSM as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than TSM and that has 10,000% upside potential, check out our report about this cheapest AI stock.

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Disclosure: None.