Goldman Sachs Adds TSM to Conviction Buy List—Here’s Why

Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is one of the 10 AI Stocks Making Waves on Wall Street. On June 25, Goldman Sachs raised its price target for Taiwan Semiconductor Manufacturing Co to NT$1,210 from NT$1,145, maintaining its “Buy” rating, and placing it on its Conviction Buy list.

The firm’s price target raise reflects easing concerns related to large AI-chip order cuts and expanding demand for the company’s advanced CoWoS packaging beyond artificial-intelligence workloads.

The firm increased its earnings forecasts by 2%-6% for 2025-27 after boosting projected wafer revenue from 3-nanometre and 5-nanometre production, anticipating TSMC’s dollar revenue to grow an estimated 29% next year and 17% in 2026.

A close up of a computer server rack powering the backbone of a wireless infrastructure.

The firm believes that due to an improved supply-chain coordination between TSMC and server builders, it is rather unlikely that there are any further reductions in AI processor orders. It also highlighted that more smartphone, server, and networking customers are now adopting CoWoS – a chip-on-wafer packaging technique. The CoWoS allows multiple chips to be combined inside a single module, helping diversify demand.

While we acknowledge the potential of TSM as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.