TSMC Stock Forecast 2024, 2025 & Beyond: Can It Outperform Nvidia?

TSMC (TSM) stock is rapidly gaining ground on larger competitors like Nvidia (NVDA). Though it lags behind the top chipmaker, TSMC’s recent performance is quite a bit stronger than that of the broader market due to improved sector conditions and emergent tech.

Likewise, TSMC’s financial management is beyond reproach and supports the stock’s ascendant status.

Still, TSMC investors might face some unique risks, which makes analysts a bit more bearish on the stock’s prospects, even as many recommend that investors buy it.

In our TSMC stock forecast for 2024, 2025, and beyond, we analyze the company’s recent performance, evaluate its financial results, and reveal the opinions of stock market analysts.

Table of Contents Table of Contents

1. Key Takeaways
2. Summary of the Latest TSMC Stock Predictions
3. TSMC Stock Analysis: A Year in Review
4. What’s Driving TSMC Stock?
5. TSMC Stock Forecast: Expert Opinions
6. The Bottom Line: Should I Invest in TSMC?
7. FAQs

Show Full Guide

Table of Contents

1. Key Takeaways
2. Summary of the Latest TSMC Stock Predictions
3. TSMC Stock Analysis: A Year in Review
Show Full Guide
4. What’s Driving TSMC Stock?
5. TSMC Stock Forecast: Expert Opinions
6. The Bottom Line: Should I Invest in TSMC?
7. FAQs

Summary of the Latest TSMC Stock Predictions

TSMC Stock Analysis: A Year in Review

Nvidia isn’t the only chipmaker riding artificial intelligence tech momentum. The second-largest semiconductor stock with a market cap of $800.5 billion, Taiwan Semiconductor (TSMC for short) is a publicly traded chipmaker centrally headquartered and located on the island of Taiwan.

While not demonstrating as outsized growth as Nvidia, TSMC investors are still doubtlessly happy with its 51% return over the past year.

TSMC management seems to think its record-setting climb will continue, projecting sales to grow 10% over the next year amid a “golden age of opportunity with AI,” as senior VP Cliff Hou claimed.

That’s a hair more conservative than World Semiconductor Trade Statistics’ 13.1% sector growth expectations but still points to expected success moving forward.

The TSMC stock forecast has one benefit over Nvidia, though – centrally located to other tech-savvy regions and subject to fewer trade restrictions, TSMC has greater sales diversity through strategic contracts with Chinese and Japanese government officials.

This is just one factor influencing the TSMC stock forecast moving forward, though both good and bad.

What’s Driving TSMC Stock?

Wider tech emphasis and artificial intelligence’s ascendancy play a role, but unique factors also contribute to increased interest and investigation into TSMC news today.

TSMC’s Geopolitical Risk

The omnipresent, unavoidable, and unpredictable 800-lb gorilla in the room when it comes to the TSMC stock forecast is the region’s geopolitical concern. The risk of war between Taiwan, where TSMC headquarters, and China remains elevated despite US material support and funding to the tiny island republic.

The risk isn’t the one investors can mitigate, especially considering management’s primary plan in case of invasion is to trigger self-destruct sequences throughout its facilities.

Still, TSMC’s management is proactively planning to prevent (or at least limit) the damage done. TSMC is increasingly expanding its existing footprint to include manufacturing facilities that are either operational or in development in Japan, Germany, and the United States.

War is obviously bad for all involved, particularly those caught in the middle on both sides, but it poses a long-term, real, and unpredictable risk to TSMC investors too.

Strategic Partnerships

While hard tech industries like chipmaking are prone to disruption risk — like a startup developing new tech that puts existing offerings to shame — TSMC has a sufficiently bundled client list that will help protect the TSMC stock price from new entrants.

TSMC’s expansive and cutting-edge offerings also tend to sell within a multi-year contract, ensuring quality revenue forecasts.

Major partners include Apple, Qualcomm, Nvidia, AMD, and various other AI, computing, and even automotive industry leaders. In the words of Morningstar analyst Phelix Lee:

These far-reaching partnerships “readily justify hefty investments in new process nodes by convincing customers to share detailed roadmaps, while smaller foundries have to build facilities first and wait for orders that TSMC cannot fill.”

Financial Engineering

Not content to keep the innovative engineering to the factory floor, Taiwan Semiconductor Manufacturing news recently unveiled a plan to issue 3,000 new shares at a par value of $1,000,000 each.

Likely aimed at institutional investors or funds willing to take a higher stake in exchange for a board seat, the dilutive offering nevertheless lets TSMC quickly raise capital while emphasizing its relative value, no matter which share class you own.

TSMC’s Financial Standing

As expected from such a strong showing in a stock, especially in today’s economy, TSMC’s financial management is stellar. Earnings are consistently strong, even when described as “muted,” and TSMC shows solid improvement quarter-over-quarter.

Phelix Lee from Morningstar says:

“TSMC’s disciplined approach to capital spending in 2024—and possibly in the next few years—reduces risks of oversupply and allows for flexibility in cutting-edge research to maintain its leadership.”

Ill-disciplined approaches to capital spending caused many wide-reaching layoffs and downsizing across tech sector stocks, including Meta and Google. In contrast, TSMC is expanding its headcount across new overseas facilities, and it’s long considered that “firings and layoffs at TSMC are almost unheard of.”

TSMC Stock Forecast: Expert Opinions

Mark Li at Bernstein said in an emailed note seen by Techopedia that TSMC stock is set to continue its winning streak throughout 2024 and exhibit “impressive growth” as the wider sector’s post-pandemic supply chains finally straighten and artificial intelligence hardware demand accelerates.

Morningstar analyst Phelix Lee likewise takes a long-term view, saying that TSMC is at the forefront of trends that “may last for decades,” though he sticks his TSMC price target at $146 per share, about $10 below today’s per-share pricing.

The slightly negative sentiment may come from the fringe opinion that regional diversification and a “new approach to diversify production geographically may add cost pressures with little added resilience to stability.”

Adam Clark at Barron’s is also a bit downbeat on his TSMC share price forecast. In his latest piece on the company, he says that “management offered a downbeat assessment,” seemingly pointing toward a wider semiconductor sector downturn in coming months.

Needham supports the thesis, with analyst Charles Shi saying in a note to clients that “the main reason for the reduced industry outlook was the lowered expectation for automotive semis.”

Finally, on the more optimistic side, UBS analysts are fairly dismissive of the geopolitical dimension, with Bernard Ahkong saying that “the strategic nature of these products and the desire to build local supply chains means that arguably geopolitics has become a tailwind for the space.”

In other words, the risk is there – but it’s a good thing!

Latest TSMC Stock Predictions for 2024, 2025 & 2030

Analyst consensus is generally that the current TSMC stock price makes it worth a “Buy,” according to data aggregated by TipRanks. Within those polled analyst subgroups, TSMC stock predictions range from $150 to $188 over the next year, with the broad consensus at $163.11.

Morningstar takes a more pessimistic approach to its TSMC stock forecast 2024, marking $146 as its fair price with an upper TSMC price target range of $159 and a lower limit of $102.

Here’s where some specific firms stand on their one-year TSMC stock predictions:

Looking ahead, WalletInvestor, in its TSMC stock forecast 2025, projects that the stock’s performance will remain strong, and it could be valued at as much as $164.29 by December of next year. The site’s five-year TSM stock forecast has the price rising to $173.36.

Closing out the decade, analysts at Motley Fool think highly of the TSMC stock forecast 2030, projecting a $1 trillion market cap before the decade ends.

However, it’s worth noting that analysts’ and algorithm-based projections might prove to be wrong.

The Bottom Line: Should I Invest in TSMC?

So, is TSM a buy, hold, or sell? If you’re bullish on AI’s long-term prospects but want to hit a wide range of tech applications, quality semiconductor stocks like Nvidia and TSMC are top picks as their sales streams diversify enough to offset sector-specific risk. But where TSMC offsets a risk, investors also assume the sizable geopolitical risk represented.

FAQs