Morgan Stanley Raises TSMC (TSM) Target on Pricing Power, Growth

Taiwan Semiconductor Manufacturing Company Ltd. (NYSE:TSM) is one of the must-buy semiconductor stocks to invest in. Morgan Stanley has raised its price target on Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) to NT$1,388 from NT$1,288, reflecting optimism around the chipmaker’s pricing power and growth trajectory. When translated to U.S. dollar terms, the new target equates to approximately $259 per share, implying a potential upside of about 10% from the current U.S.-listed ADR price of $235.02. The firm maintains an Overweight rating on the stock.

Driving the improved outlook is TSMC’s anticipated 3% to 5% wafer price increase, a move supported by persistent demand for advanced chips and adverse foreign exchange dynamics. Morgan Stanley believes this adjustment could push TSMC’s gross margins well above the company’s stated goal of “53% and higher” for the coming year, signaling stronger-than-expected profitability.

Adding to the positive momentum is the resumption of Nvidia’s H20 chip shipments to China, which could materially benefit TSMC, given the size and relevance of the Chinese AI market. These GPU orders alone are expected to account for 2%–3% of TSMC’s revenue in 2025. Separately, the company’s planned $165 billion investment in U.S.-based manufacturing facilities may also improve its positioning in ongoing trade and tariff discussions, potentially bolstering its competitiveness in North America.

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Disclosure: None.