TSM Faces Currency Headwinds-Bernstein Trims Target, Maintains 'Outperform'

Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is one of the AI Stocks Making Waves on Wall Street. On July 9, Bernstein SocGen Group analyst Mark Moerdler lowered its price target on the stock to $249.00 from $251.00, while maintaining an “Outperform” rating on the stock. The firm quoted rapid foreign exchange movements as a reason behind the price target adjustment.

According to the firm, currency headwinds may create significant pressure on the company’s margins and revenues. It now assumes an exchange rate of 32.5 New Taiwan dollars to 1 U.S. dollar in Q2 2025 and 29 for Q3 2025 and beyond.

These currency shifts are anticipated to drive 5% headwind versus Taiwan Semi’s guidance assumption in Q2 2025 and another 6% in Q3 2025. It also estimates foreign exchange pressure will impact Taiwan Semi’s revenue by approximately 5.5% in 2025 and another 4-4.5% in 2026 for the full year.

Nevertheless, the firm believes TSM’s fundamentals will improve despite currency challenges.

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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