TSM: Morgan Stanley Says Buy Ahead of Earnings on Strong AI Demand

Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is one of the AI Stocks in the Spotlight Today. On July 14, Morgan Stanley added a catalyst-driven idea on Taiwan Semiconductor. The firm said it’s bullish on the semis stock heading into earnings and urges investors to buy. It is optimistic that the chipmaker will raise its full-year revenue guidance, backed by strong AI demand.

The firm highlighted in its Sunday note how TSMC’s preliminary second-quarter revenue of NT$933 billion beat both company guidance and the firm’s own estimate.

The “likelihood of full-year revenue raise is now higher,” it said, noting how 27% year-on-year revenue growth in 2025 also appears “quite achievable.”

Even though PC and smartphone demand isn’t very strong, it is expected to have steady utilization rates.

“Some 3nm PC CPU order cuts were quickly replaced by crypto mining demand,” analysts led by Charlie Chan said.

This reflects how customers are placing orders before a planned wafer price hike in 2026.

TSM: Morgan Stanley Says Buy Ahead of Earnings on Strong AI Demand

In the wake of new semiconductor tariffs, TSMC is well-positioned due to its growing US investment footprint.

“We maintain our view that TSMC’s commitment to the US$165bn investment in the U.S. fab should increase its chances of receiving an exemption.”

Overall, the company is a top pick for Morgan Stanley, driven by sustainable AI semiconductor demand, expected margin expansion, and its advanced foundry services.

“We expect TSMC’s share price to rise if it raises full-year revenue guidance. We suggest accumulating ahead of the July 17 print given low expectations.”

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

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.