Taiwan Semiconductor Manufacturing Co Ltd (NYSE:TSM) reached a historic milestone this week as surging AI demand propelled the chipmaker into the top tier of global market capitalization rankings.
The stock has climbed 208% over the past five years.
It produces chips for major customers, including Nvidia Corp (NASDAQ:NVDA) and Broadcom Inc (NASDAQ:AVGO), supplies processors used in Tesla Inc's (NASDAQ:TSLA) electric vehicles and Full Self-Driving systems, and manufactures chips for Apple Inc's (NASDAQ:AAPL) smartphones.
International Data Corp projects Taiwan Semiconductor will hold a 67% share of the global foundry market in 2025.
$2 Trillion Milestone Amid AI Rally
The contract chipmaker’s market value climbed to $2 trillion for the first time on Wednesday.
The rally placed the Taiwanese chipmaker sixth among the world’s largest companies by market cap, just behind Amazon.com Inc (NASDAQ:AMZN).
Taiwan Semiconductor had leapfrogged Meta Platforms Inc (NASDAQ:META), and Broadcom in market cap by January 2026.
Analyst Backs Execution Strength
DA Davidson analyst Gil Luria initiated coverage of Taiwan Semiconductor with a Buy rating and a $450 price forecast, citing the company’s consistent execution.
The analyst said the chipmaker stands out because it converts complex chip design transitions into scalable, cost-efficient production and delivers them on schedule.
He pointed to the company’s nearly 60% gross margin as evidence of strong operational discipline.
AI Spending Fuels Growth Outlook
AI demand continues to drive results.
Taiwan Semiconductor reported January revenue of NT$401.3 billion ($12.7 billion), up 36.8% year-over-year, exceeding its projected 30% full-year growth.
Broader AI spending also supports the outlook.
Alphabet Inc (NASDAQ:GOOGL) Google raised its 2026 capital expenditure forecast to $175 billion–$185 billion, while Amazon outlined a $200 billion plan.
Wedbush analyst Dan Ives expects Big Tech capex to reach $550 billion–$600 billion in 2026, up from about $380 billion in 2025, and sees the semiconductor industry approaching $1 trillion in annual revenue as AI and data center demand accelerate.
TSM Price Action: Taiwan Semiconductor shares were up 0.68% at $390.35 at the time of publication on Thursday, according to Benzinga Pro data.
