Bank of America Lifts Taiwan Semiconductor Manufacturing (TSM) Price Outlook on Revenue and Earnings Growth Prospects

Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is one of the high-growth semiconductor stocks that are expected to be profitable in 2025. On October 7, analysts at Bank of America reiterated a ‘Buy’ rating and raised the price target on the stock to NT$1,600 from NT$1,400.

The adjustment is in response to what the investment bank touts as an improved pricing outlook. Additionally, the bank expects the company to deliver stronger-than-expected earnings through 2026. Consequently, it has lifted its 2026 and 2027 earnings per share by 8% and 9% respectively.

“We lift 2026/27E EPS estimates by 8%/9% for TSMC, mainly due to an improved pricing outlook,” the analysts wrote. “Consequently, we raise our PO to NT$1,600 (US$330) from NT$1,400 (US$290), and the valuation base remains 2026E.”

Bank of America expects the company’s revenue to grow 24% year-over-year, driven by the ramp-up of 2nm technology. The bank expects the 2nm technology to contribute about 9% of TSM’s revenue. It also expects the company to benefit from strong demand for non-Apple smartphones and high-performance computing, which will drive momentum for the 3nm process.

Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) manufactures semiconductors, or microchips, for other companies that design them but don’t have their own factories, a business model known as a dedicated foundry. It also provides the most advanced and comprehensive portfolio of process technologies, including 2nm and 3nm, for a wide range of products.

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Disclosure: None. This article is originally published at Insider Monkey.