Taiwan Semiconductor Manufacturing Co. has once again secured a position among the world’s top 10 most valuable companies, driven by persistent optimism in artificial intelligence, which has propelled its stock to unprecedented levels.
Following a remarkable 14% surge last week, the chipmaker’s market capitalization reached an all-time high, although it saw a slight 2% dip in early trading on Monday, bringing it to $634 billion.
Nevertheless, this figure remains above that of Broadcom Inc., reinstating its place in the top 10 rankings, marking its return since 2020.
Analysts at Morgan Stanley and JPMorgan Chase & Co. anticipate further growth for the semiconductor giant, fueled by the burgeoning revenue from artificial intelligence and robust pricing power.
The recent frenzy surrounding generative AI has significantly boosted the rally in global chip stocks, although Nvidia Corp. experienced its most significant decline in nine months on Friday, attributed to profit-taking.
“Generative AI semi is an obvious growth driver for TSMC,” noted analysts from Morgan Stanley, including Charlie Chan, in a March 7 report. They also highlighted that the company’s expansion overseas serves to alleviate geopolitical concerns.
TSMC reported a 9.4% revenue increase in January-February, driven by the demand for high-end chips amidst a surge in artificial intelligence activities, offsetting potential repercussions from declining iPhone sales.
Several brokerages, including Morgan Stanley and JPMorgan, have recently raised their price targets for the stock by approximately 10%.
The options market indicates ongoing bullish sentiment towards TSMC’s American Depository Receipts, with the put-to-call ratio hitting a one-month low.
This suggests that options traders have been acquiring more bullish contracts than bearish ones, even as the company’s shares continue to reach new highs, according to data compiled by Bloomberg based on open interest.
