Goldman Sachs Maintains Buy Rating on TSMC with $242 Price Target

Goldman Sachs analyst Bruce Lu maintains a Buy rating on TSMC (TSM) with a price target of $242.00. Lu is ranked #1193 out of 9622 analysts by TipRanks. TSMC has a Strong Buy analyst consensus and a price target consensus of $223.71, implying a 1.32% upside from current levels. The company reported a quarterly revenue of $839.25 billion and a net profit of $361.56 billion for the quarter ending March 31.

In the latest trading session, Taiwan Semiconductor Manufacturing Company (TSMC) (TSM) closed at $222.74, marking a +1.2% move from the previous day. Elsewhere, the Dow lost 0.25%, while the tech-heavy Nasdaq added 0.31% [1].

Shares of TSMC witnessed a gain of 11.34% over the previous month, outperforming the Computer and Technology sector's gain of 7.62% and the S&P 500's gain of 5.05% [1]. The investment community is closely monitoring the performance of TSMC ahead of its forthcoming earnings report. It is anticipated that the company will report an EPS of $2.32, marking a 56.76% rise compared to the same quarter of the previous year. The consensus estimate is calling for quarterly revenue of $30.05 billion, up 44.32% from the year-ago period [1].

Looking at the entire year, the Zacks Consensus Estimates forecast earnings of $9.28 per share and revenue of $116.93 billion, indicating changes of +31.82% and +29.8%, respectively, compared to the previous year [1]. Goldman Sachs analyst Bruce Lu maintains a Buy rating on TSMC with a price target of $242.00. Lu is ranked #1193 out of 9622 analysts by TipRanks. The company has a Strong Buy analyst consensus and a price target consensus of $223.71, implying a 1.32% upside from current levels [2].

Goldman Sachs increased its earnings forecast for TSMC by 2-6% for 2025-2027, driven by higher wafer revenue projections for 3nm and 5nm processes. The investment bank noted easing concerns over further AI order cuts due to decreasing mismatches in the supply chain. TSMC's impressive revenue growth of 40% in the last twelve months and a robust financial health score of 3.43/5 on InvestingPro support its strong operational performance [2].

Goldman Sachs significantly raised its forecast for TSMC’s CoWoS (chip on wafer on substrate) shipments to 664,000 units in 2025, 1,080,000 in 2026, and 1,566,000 in 2027. The firm expects CoWoS demand to grow as chiplet designs expand beyond AI applications into smartphones, servers, networking, and other segments. TSMC’s market leadership is reflected in its strong margins, with a gross profit margin of 57.4% and an attractive P/E ratio of 20.2 [2].

The company reported a quarterly revenue of $839.25 billion and a net profit of $361.56 billion for the quarter ending March 31. TSMC's valuation metrics, including a Forward P/E ratio of 23.73 and a PEG ratio of 1.14, align with industry averages, indicating no significant deviation from the group [1].

References:
[1] https://www.nasdaq.com/articles/tsmc-tsm-stock-moves-120-what-you-should-know
[2] https://www.investing.com/news/analyst-ratings/tsmc-price-target-raised-to-nt1210-on-ai-chip-packaging-growth-93CH-4110811