TSMC Hits Record High as Brokers Raise Price Targets ahead of 2Q24 Earnings

Taiwan Semiconductor Manufacturing Co. (TSMC) achieved a record intraday high in Taipei, with its shares surging by as much as 4.5%, extending its year-to-date rally to over 75%.

This spike came after Morgan Stanley joined a cohort of brokers in boosting their price targets on the chipmaker ahead of its upcoming earnings release.

Morgan Stanley upgraded its target on TSMC by approximately 9%, citing expectations for the company to revise its full-year sales forecast during the earnings announcement scheduled for next week. The brokerage firm also anticipates TSMC to increase wafer prices, leveraging its strong negotiating position.

Analysts at Morgan Stanley praised TSMC’s effective “hunger marketing” strategy, with recent supply chain assessments indicating that the company is signaling tight availability of cutting-edge foundry supply in 2025. This messaging implies that customers may face challenges securing sufficient capacity allocation without recognizing the value proposition offered by TSMC.

Meanwhile, JPMorgan analysts expected TSMC to provide an optimistic revenue outlook during the earnings call, particularly in relation to AI accelerator demand.

The positive outlook from Morgan Stanley and JPMorgan follows similar sentiments expressed by brokers such as Nomura Holdings Inc. and Mizuho Securities Co. regarding TSMC’s performance leading up to its second-quarter results.

TSMC, recognized for producing the world’s most advanced chips utilized by technology giants like Apple Inc. and Nvidia Corp., is expected to reveal a 36% year-on-year revenue growth, the swiftest rate since the final quarter of 2022, according to Bloomberg data.

TSMC’s stock in Taipei surpassed NT$1,000 (approximately $31) last week, bolstered by enthusiasm surrounding its earnings prospects. With its market value based on American depositary receipts briefly exceeding that of Berkshire Hathaway Inc., TSMC currently stands as the world’s eighth-largest company by market capitalization, which now exceeds $950 billion.