Shares of Taiwan Semiconductor Manufacturing (TSM +1.40%) (TSMC) rose on Wednesday, finishing the day up 4%. The jump comes as the S&P 500 gained 0.4% and the Nasdaq Composite gained 0.9%.
The semiconductor giant's stock got a boost after an analyst raised his price target on the stock.
NYSE: TSM
Key Data Points
Needham raises its target
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."
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Intel may be shutting down part of its fabrication operation
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.
TSMC is in a solid position
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.
