Wall Street Just Boosted TSM’s Target—Here’s What’s Behind It

Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is one of the 10 Buzzing AI Stocks on Wall Street Right NowOn July 1, Needham analyst Charles Shi raised the firm’s price target on the stock to $270 from $225 and kept a “Buy” rating on the shares, citing robust AI-driven growth prospects through 2027.

Based on its newly launched AI wafer demand model, the firm anticipates that TSM’s total revenue will grow from $87.9 billion in 2024 to an estimated $114 billion this year, $130 billion in 2026, and $160 billion in 2027. Meanwhile, its AI chip revenue may increase from $26 billion this year to $33 billion in 2026 and $46 billion in 2027. Silicon content growth is poised to become an important driver for TSM’s AI revenue expansion.

The company has set a goal of reaching $90 billion in AI chip revenue by 2029.

“We think that TSMC’s extremely bullish outlook on AI may in fact be built on a set of conservative assumptions.”

With regard to capital expenditure predictions, the firm anticipates Taiwan Semi’s capital expenditure to grow moderately from $40 billion in 2025 to $45 billion in 2026 and $50 billion in 2027. It also pointed out that the rollout of Rubin Ultra should lead to growth re-acceleration in 2027 and beyond, and that CoWoS/HBM packaging capital expenditure may stay subdued in 2026 before HBM packaging capital expenditure gains traction in 2027.

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

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.