TSM Stock Forecast & Price Target

Taiwan Semiconductor Manufacturing Co. (TSMC) is forecasting a notable increase in earnings per American Depository Share (ADS) from $12.13 to $12.61 for CY26, supported by strong AI demand, which is expected to provide upside potential. The company anticipates a 25% revenue growth rate for 2026, an increase from the previously estimated 20%, largely driven by new N3 capacity and incremental revenue growth becoming evident in the latter half of 2026. Additionally, TSMC's ability to gain market share in CPU manufacturing through collaborations with major clients such as Apple, AMD, and Intel positions the company to continue leveraging its operational efficiency and cutting-edge technologies for sustained profitability.

Taiwan Semiconductor Manufacturing Co. (TSMC) faces a negative outlook primarily due to its guidance indicating a potential decline in revenue during Q4 2025, which marks the first such forecast for this seasonally strong quarter since coverage began. Furthermore, despite strong revenue and gross margins in Q3 2025, the company is experiencing pressures from foreign exchange impacts and increased competition in the foundry space that contribute to anticipated declines in gross margins. Additionally, the long-term outlook suggests that capital intensity may remain high, with predictions of decreasing demand from China and stagnant spending on leading-edge foundry services, all of which potentially undermine TSMC's profitability moving forward.