Wall Street Gets More Bullish on TSMC's AI Dominance

Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is one of the AI Stocks Analysts Are Watching Closely. On January 15, BofA Securities analyst Brad Lin raised the price target on the stock to $470.00 (from $430.00) while maintaining a “Buy” rating. Firm analysts are confident in TSM’s tech leadership, underpinned by strong pricing power, capacity stability, and dominance in premium nodes.

They noted that TSMC’s tech leadership should sustain, lifting blended wafer pricing by an estimated 30% CAGR from 2025 to 2027 compared to a 17% CAGR from 2020-2025.

This reflects higher pricing at advanced nodes, wider premiums for new nodes, and a mix shift on capacity optimization. It estimates wafer capacity and shipment to stay stable, with advanced node growth offset by declines in mature nodes.

Analysts also anticipate strong pricing and sustained utilization to allow TSMC’s sales to outgrow depreciation at a 20% CAGR, expanding gross margins.

"We estimate its wafer capacity and shipment could stay stable, with advanced node +15% CAGR from ’25–’27 balanced by decline in mature nodes. The strong pricing and sustaining utilization should allow its sales to outgrow depreciation (+20% CAGR), expanding its GMs to 64%/65% in ’26/27 (vs. its structural GMs of 56%+)."

Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) manufactures and sells advanced chips used in artificial intelligence applications.

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