Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is one of the AI Stocks in the Spotlight This Week. On October 16, Needham analyst Charles Shi raised the price target on the stock to $360.00 (from $270.00) while maintaining a “Buy” rating. The rating affirmation follows TSM’s robust third-quarter performance.
TSM’s third-quarter revenue came in above the high end of the guidance range. Moreover, it delivered robust gross margins at 59.5% even though there were fears of an FX-driven erosion in the previous quarter.
It also guided down fourth-quarter revenue by a mere 1% quarter-over-quarter. This is significantly better than the previously implied 10% decline, while keeping its gross margins steady at 60%. TSM management also raised its full-year 2025 revenue growth forecast from an estimated 30% to 35% and narrowed its capital expenditure guidance to $40-42 billion from $38-42 billion.
The company’s AI outlook is incrementally stronger, noted the analysts, even if China’s AI market remains closed. The firm further added that TSM’s Arizona build-out is accelerating, with plans to acquire more land, increase N2 node implementation, and initially leverage Amkor Technology for packaging Arizona-produced wafers.
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) manufactures and sells advanced chips used in artificial intelligence applications.
While we acknowledge the potential of TSM as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
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