TLDR
- TSMC shares experienced a 6.9% surge, reaching a record high after Goldman Sachs elevated its price target by 35% to NT$2,330.
- Goldman anticipates that the demand for AI will lead to capacity constraints extending through 2027 and projects TSMC will invest $150 billion in expansion from 2026 to 2028.
- The investment bank has revised its forecast for TSMC’s revenue growth to 30% in 2026 and 28% in 2027, an increase from its prior estimates of 22%.
- Despite significant capital expenditures, TSMC’s gross margins are expected to remain above 60% until 2028.
- The stock saw a 44% increase in 2025, propelling the company’s market valuation beyond $1 trillion for the first time.
TSMC shares climbed by as much as 6.9% on Monday, marking their most substantial single-day gain since April and pushing them to a new record high in Taipei trading.
This upward movement was initiated by Goldman Sachs, which raised its price target for the stock from NT$1,720 to NT$2,330, while reaffirming its Conviction Buy rating.
The chip manufacturer spearheaded a broader rally in Asian technology stocks as investors directed capital towards AI-focused companies. TSMC’s performance contributed to Taiwan’s Taiex index surpassing the 30,000 mark for the first time in its history.
hits all time high as Goldman Sachs increases price target by 35%
Target 1: $399
Target 2: $453— Trader Edge (@Pro_Trader_Edge)
Goldman analysts, led by Bruce Lu, characterized AI as a “multi-year growth engine” for TSMC. The firm now anticipates that the company will allocate over $150 billion in capital expenditures between 2026 and 2028.
This substantial investment in new factories and equipment is deemed necessary by Goldman to address the rapidly escalating demand for AI chips.
Capacity Crunch Expected Through 2027
The investment bank forecasts that TSMC’s advanced 3nm and 5nm production lines will experience sustained tightness through 2027, as the consumption of chips for AI applications grows so rapidly that silicon demand will outstrip supply.
Goldman has increased its revenue growth projections for TSMC, now expecting 30% growth in 2026 and 28% in 2027, both measured in dollar terms, up from previous estimates of 22% for each year.
TSMC is a supplier to major clients such as Nvidia and Apple, holding a dominant position in contract chip manufacturing, particularly for cutting-edge semiconductors.
Margins Stay Strong Despite Spending Spree
Goldman predicts that TSMC’s gross margins will reach and remain above 60% from 2026 through 2028, a strong performance despite the company’s significant investments in new facilities.
The firm attributed this to minimal dilution from overseas factories and ongoing productivity enhancements, indicating TSMC’s ability to maintain high efficiency even as it expands production beyond Taiwan.
Goldman also raised its forecasts for CoWoS shipments, a crucial packaging technology for AI chips, projecting 1.185 million wafers in 2026 and 2.195 million in 2027.
TSMC’s stock surged by 44% in 2025, pushing its market value above $1 trillion for the first time and establishing it as one of the world’s most valuable companies.
Other Asian chip stocks also saw gains on Monday, with Samsung Electronics extending its rally for a fifth consecutive session and Japanese equipment makers Tokyo Electron and Advantest each jumping over 7%.
Sanford C. Bernstein analysts described TSMC’s capacity as “king” for leading-edge semiconductors, noting that most of the world’s top chip companies depend on its manufacturing services.
TSMC is scheduled to report its quarterly earnings on January 15, which will provide investors with a clearer indication of AI demand trends heading into 2026.
