Nvidia CEO, Jensen Huang, praises Taiwan Semiconductor, yet questions if investing in TSM stock is worthwhile at its current high prices.
TSMC Gemini Soars to New Heights Amidst AI Demand and Global Partnerships
In a significant development for the semiconductor industry, Taiwan Semiconductor Manufacturing Company (TSMC) has seen its stock soar to a new high of $270.54, driven by surging artificial intelligence (AI) demand and strategic partnerships with major tech giants.
The growth was primarily fueled by the increasing demand for AI chips, which is projected to grow at over 40% Compound Annual Growth Rate (CAGR) through 2028. TSMC has capitalised on this trend by successfully developing its 2-nanometer process technology, positioning itself as a key player in the AI infrastructure buildout.
Nvidia, a leading player in the AI sector, has praised TSMC and even invested $5 billion into Intel, with TSMC providing foundry support. Nvidia's CEO, Jensen Huang, has previously remarked that buying TSMC stock is a smart decision, and he recently reiterated his praise, further boosting investor confidence.
Intel's CEO Lip-Bu Tan has also confirmed that they will continue to work with TSMC, with major customers such as Apple (AAPL) and Advanced Micro Devices (AMD) lined up to utilise TSM's advanced node technology.
Analysts maintain a positive outlook for TSM stock, with an average price target of $277.12. TSM's foundry market share expanded to 38% in Q2 2025, up from 31% year-over-year, further consolidating its strong foundry foothold in the industry.
Despite potential headwinds from U.S. tariff policies and geopolitical tensions with China, analysts remain optimistic about TSM's performance through 2025 and into 2026. The forecast for the TSM stock price in 2026 ranges widely, with an average analyst target around $250-$280, while some long-term projections predict it could reach up to $500 by the end of 2026.
TSMC's critical role in the AI infrastructure buildout and dominant market position suggest continued strong performance. The company has also taken steps to reinforce its position, such as launching an AI chip R&D center in Germany as part of its aggressive reinvestment strategy.
Moreover, MediaTek has completed tape-out for an upcoming flagship chip using TSM's advanced process, further demonstrating the company's ability to cater to a diverse range of customers.
However, it's worth noting that TSMC's 14-day Relative Strength Index (RSI) is currently in overbought territory, suggesting that a correction could be imminent. Nonetheless, with its strong fundamentals and strategic partnerships, TSMC remains a compelling investment opportunity for those looking to capitalise on the growing AI market.
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