Needham Raises PT Target for TSMC, Keeps Buy Rating

Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is one of the 11 Best Foreign Stocks to Buy According to Hedge Funds. On July 1, Needham increased its price target on Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) from $225 to $270 and kept a “Buy” rating.

The research firm highlighted strong AI-driven growth prospects for the company through 2027.

Needham Raises PT Target for TSMC, Keeps Buy Rating

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

Needham analysts expect Taiwan Semiconductor Manufacturing Company Limited’s (NYSE:TSM) total revenue to rise from about $114 billion in 2025 to $130 billion in 2026 and $160 billion in 2027. These numbers are based on the firm’s newly launched AI wafer demand model.

Specifically, AI revenue is expected to grow from $26 billion in 2025 to $33 billion in 2026 and $46 billion in 2027. Needham believes that the silicon content growth is becoming an increasingly important reason for Taiwan Semiconductor Manufacturing Company Limited’s (NYSE:TSM) AI revenue growth.

Additionally, Needham forecasts that the company’s capital expenditure will increase from $40 billion in 2025 to $45 billion in 2026 and $50 billion in 2027. The firm expects a shift in mix toward equipment that could boost the wafer fab equipment outlook, especially for 2027.

The firm noted that the ramp-up of Rubin Ultra is likely to help Taiwan Semiconductor Manufacturing Company Limited’s (NYSE:TSM) growth to re-accelerate in 2027 and beyond.

Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is a Taiwanese multinational semiconductor contract manufacturing and design company that specializes in manufacturing, packaging, and testing integrated circuits for various industries.

While we acknowledge the potential of TSM as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than TSM and that has a 100x upside potential, check out our report about the cheapest AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.