The surge in demand for artificial intelligence technology can largely be attributed to the global chip supplier, Taiwan Semiconductor Manufacturing (TSM). According to Susquehanna analyst Mehdi Hosseini, TSM is at the forefront of the AI revolution, with all roads in the AI industry leading back to this semiconductor giant. The firm asserts that the real re-rating of TSM has not even begun, given its pivotal role in manufacturing key AI components.
Susquehanna’s view on Taiwan Semiconductor shares is that they are undervalued, especially when compared to the broader VanEck Semiconductor Index. TSM’s U.S.-listed shares have seen an impressive 34% rally this year, making it the second-best performer in the SMH. With ongoing investments in AI technologies, TSM is poised for even further growth, potentially rallying another 27% based on the firm’s optimistic price target of $180.
The bullish sentiment surrounding Taiwan Semiconductor is supported by the anticipation of increased demand for cutting-edge tools required for new AI products. As more customers seek advanced semiconductor solutions for their AI innovations, TSM is expected to see a surge in wafer shipments and revenue. Hosseini forecasts that the company’s first-quarter revenue will exceed expectations and second-quarter revenue will show significant quarter-over-quarter growth. Additionally, he projects an earnings per share (EPS) power of $10, instilling further confidence in TSM’s future prospects.
Taiwan Semiconductor Manufacturing stands as a key player in the artificial intelligence landscape, with its innovative chip technology driving the AI revolution. As the demand for AI components continues to grow, TSM is well-positioned to capitalize on this trend and deliver substantial returns for investors. With a strong track record of performance and a positive outlook for future revenue growth, TSM remains a prominent player in the semiconductor industry and a driving force behind the advancement of artificial intelligence technologies.