TSM Stock Forecast & Price Target

Taiwan Semiconductor Manufacturing Company (TSMC) commands a mid-60s market share within the semiconductor foundry space, supported by its extensive scale and high-quality technology, which contribute to solid operating margins. The company has recently raised its fiscal year 2025 revenue growth outlook from 24-26% to approximately 30%, indicating robust demand, particularly fueled by the increasing needs of the artificial intelligence sector. TSMC's business model, along with the economies of scale inherent in high fixed-cost industries, positions it favorably with no anticipated competitive challenges in the near future.

Taiwan Semiconductor Manufacturing Co. (TSMC) has raised its fiscal year guidance, yet it indicates a high single-digit percentage decline in revenue for the fourth quarter of 2025, marking a significant departure from its traditionally strong seasonal performance. This shift represents TSMC's first guidance for a decline in Q4 since coverage began in 2021, raising concerns about the company's ability to sustain momentum in a competitive market. Additionally, the company anticipates gross margins to decrease by approximately 200 basis points in the third quarter of 2025 due to foreign exchange impacts and increasing costs associated with ramping up overseas fabs, further exacerbating potential profitability issues.