Taiwan Semiconductor's AI Dominance Drives Stock Surge Amid Market Outperformance and Geopolitical Risks

Taiwan Semiconductor Outperforming The Market Shows Moat, But It Comes With Risk - Taiwan Semiconductor (NYSE:TSM)

Taiwan Semiconductor Manufacturing Co TSM stock surged 14% year-to-date, beating the market considerably despite Washington's tariff policies and semiconductor sanctions cast a shadow over a sustained AI frenzy. During the same period, the PHLX Semiconductor Index, of which Taiwan Semiconductor is also a constituent, generated 11% returns. S&P 500 and NASDAQ Composite Indexes generated approximately 5% returns during the period. Also Read: Taiwan Semiconductor's Affiliate Fast-Tracks Singapore Plant Spurred By Geopolitics The key supplier of Nvidia Corp NVDA and Apple Inc AAPL has generated 32% returns in the last three months, compared to 29% for PHLX Semiconductor, 10% for the S&P 500, and 16% for the Nasdaq Composite. Risks The Trump administration has also explored plans to end waivers for chipmakers to prevent the export of American technology to China. Apart from the geopolitical risk, TSMC is also susceptible to currency risk due to high U.S. dollar exposure. The company's overseas unit, Taiwan Semiconductor Global, faces a currency risk - the Taiwanese dollar is strengthening against the now volatile and weakening U.S. dollar. TSMC Global Ltd. is preparing to raise $10 billion by issuing new shares to manage currency volatility and maintain capital flexibility. This marks the third such equity move since 2024, and it is the largest to date. The timing coincides with the recent appreciation of the Taiwan dollar. TSMC's CEO C. C. Wei informed shareholders this month that the stronger currency has reduced the firm's operating margin by several percentage points. Earnings and Market Share In April, Taiwan Semiconductor reported first-quarter net sales of $25.53 billion (839.25 billion New Taiwanese Dollars), up 41.6% year-over-year, topping the analyst consensus estimate of $23.92 billion. However, the net sales declined 3.4% Q/Q. In U.S. dollar terms, revenue growth was 35.3% Y/Y and down by 5.1% Q/Q. Taiwan Semiconductor's AI technology moat helped it expand its quarterly gross margins by 572 bps to 58.8%. In March, Taiwan Semiconductor chief C.C. Wei announced an additional $100 billion investment in U.S. chipmaking (on top of the $65 billion announced in April 2024). The chipmaker explored commercializing its advanced 2-nanometer process using gate-all-around (GAA) technology in the second half of 2025. According to analyst Ming-Chi Kuo, Apple is expected to equip its upcoming iPhone 18 lineup with Taiwan Semiconductor's advanced 2nm A20 chip. Intel Corp INTC and Advanced Micro Devices AMD have also selected Taiwan Semiconductor to manufacture chips using the same cutting-edge 2nm process. Taiwan Semiconductor grew its market share to 67.6% in the first quarter of 2025 from 67.1% in the previous quarter, Focus Taiwan cited Trendforce. Samsung Electronics SSNLF held a 7.7% global market share, down from 8.1% Q/Q. The top 10 contract chipmakers reported $36.4 billion in sales in the first quarter, down ~5.4% Q/Q. They account for ~97% of the global total, up from 96% in the fourth quarter. Analyst Opinion Taiwan Semiconductor has a consensus price forecast of $210.8 based on the ratings of 6 analysts. The high is $270, issued by Needham on July 1, 2025. With an average price forecast of $255 between Needham, Susquehanna, and Barclays, there's an implied 12.90% upside for Taiwan Semiconductor from these most recent analyst ratings. Last week, Cathie Wood-led Ark Invest acquired 65,102 shares of Taiwan Semiconductor. Price Action: TSM stock traded higher by 0.33% at $225.43 premarket at the last check on Wednesday. Read Next: Broadcom Outpaced Major Indexes In 2025 - What Went Down Photo by wakamatsu via Shutterstock TSMTaiwan Semiconductor Manufacturing Co Ltd$224.60-0.04%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum79.26Growth94.80QualityNot AvailableValue49.74Price TrendShortMediumLongOverviewAAPLApple Inc$209.510.81%AMDAdvanced Micro Devices Inc$134.74-1.01%INTCIntel Corp$22.60-1.09%NVDANVIDIA Corp$151.86-0.94%SSNLFSamsung Electronics Co Ltd$42.48-%Market News and Data brought to you by Benzinga APIs

Why Taiwan Semiconductor Manufacturing Stock Jumped Today | The Motley Fool

The semiconductor giant's stock got a boost after an analyst raised his price target on the stock. Charles Shi, an analyst at Needham, reiterated his buy rating on Tuesday on TSMC's stock, raising his price target from $225 to $270. The analyst believes the company's AI revenue will continue to explode, rising from $26 billion this year to $46 billion in 2027. Shi expects TSMC's dominance to continue, saying, "We expect TSMC's foundry business to strengthen as we do not foresee a competitive challenge for the next several years." That sentiment looks right on the money after it was reported today that Intel is considering shutting down a part of its fabrication efforts in favor of its next-generation fabrication capacity. If the company shuts down its 1.8 nanometer fabrication, the current industry standard, it would leave TSMC with essentially no rival until Intel's 1.4 nanometer fabrication can get off the ground. The company is clearly the global leader in semiconducting fabrication, especially that of hyper-advanced artificial intelligence-powering chips. That is a business not easily disrupted; TSMC has a substantial moat protecting it. I think the stock is a great pick.