Driven by the wave of artificial intelligence, Wall Street's optimism towards global chip giant TSMC continues to rise.

Recently, TSMC's market value has approached $1 trillion, surpassing Buffett's Berkshire Hathaway and becoming the eighth largest company in the world.

Wall Street raises TSMC target price

This week, several Wall Street investment banks raised their target prices for TSMC. These investment banks predict that strong demand related to artificial intelligence will continue, and it is expected that TSMC may raise the prices of its chip foundry business in 2025. These factors are expected to drive TSMC's performance.

The latest adjustment of TSMC's target price by Wall Street investment banks is also based on the latest hint from TSMC's new chairman, Wei Zhejia. Wei Zhejia mentioned at TSMC's annual shareholder meeting on June 4th that TSMC's AI chip foundry prices may rise.

Meanwhile, during the Taipei Computer Show, Nvidia CEO Jensen Huang also agreed that TSMC should raise prices to match the value it provides. The market interprets this as the second signal of TSMC's price increase.

Affected by potential price increase signals, several Wall Street investment banks have turned bullish towards TSMC. Goldman Sachs is one of the most optimistic investment banks among them. This week, Goldman Sachs raised TSMC's target stock price by 19% to NT $1160 and predicted that TSMC's 3nm and 5nm chip foundry prices may rise by about 1% -5%.

JPMorgan Chase has stated that TSMC may increase its revenue forecast for 2024 and may adjust its capital expenditure to a mid to high level within its guidance range. JPMorgan Chase predicts that by 2028, artificial intelligence will contribute 35% to TSMC's total revenue.

Citibank and Morgan Stanley have also recently raised their target prices for TSMC.

TSMC's Valuation Soars Alongside NVIDIA

As a leader in the chip foundry industry, TSMC has significantly benefited from the AI boom in the past two years. For global investors, TSMC's appeal lies not only in its cutting-edge technology and relatively low valuation, but also in its role as a major supplier of advanced chips to Nvidia.

This week, Nvidia surpassed Apple and Microsoft to become the world's most valuable company, marking a new height in the artificial intelligence boom in the US stock market.

According to TSMC's American Depositary Receipts (ADRs) listed in the United States, its market value surpassed Berkshire Hathaway last week, becoming the eighth largest company in the world. Since the beginning of this year, TSMC's ADR has increased by 77%.

On Tuesday, Goldman Sachs analysts wrote in a report: "With the continued spread of artificial intelligence, we see TSMC becoming more attractive in a growing positive emotional environment with a risk to return ratio. We believe that TSMC will be the main beneficiary."