TSMC Market Capitalization Hits $1 Trillion Amid AI Boom

Taiwan Semiconductor Manufacturing Company (TSM) has reached a $1 trillion market capitalization, driven by strong demand for AI technologies and a 50% increase in stock price since its April low. Investor confidence is growing, with TSMC expected to capitalize on the AI boom and raise its full-year revenue growth forecast to 30%. Analysts from Goldman Sachs and JPMorgan have noted positive trends, including strong AI-related spending by clients and rising wafer prices.

Taiwan Semiconductor Manufacturing Company (TSM) has reached a significant milestone by achieving a $1 trillion market capitalization, driven primarily by strong demand for artificial intelligence (AI) technologies. This remarkable feat comes on the heels of a 50% surge in the company's stock price since its April low, marking a nearly 50% increase from its previous low.

The growth in TSMC's market capitalization is attributed to an optimistic outlook and robust demand for advanced semiconductor technologies, particularly those used in AI applications. The company's valuation now rivals that of Berkshire Hathaway and could soon place it among the world's top 10 most valuable companies.

Investor confidence in TSMC is growing, as the company is expected to capitalize on the AI boom. TSMC has raised its full-year revenue growth forecast to approximately 30%, suggesting it will benefit from the fierce competition in AI manufacturing capacity. Analysts from Goldman Sachs highlighted TSMC's positive stance on advanced process demand, noting no signs of slowing AI customer demand. They anticipate larger price increases by 2026 [1].

JPMorgan analysts also noted that strong AI-related spending by TSMC clients and rising wafer prices could offset the negative impact of a stronger Taiwanese dollar, thereby enhancing the company's profit margin resilience [1]. TSMC's American depositary receipts were valued at around $1.2 trillion as of the close on Friday [2].

TSMC's recent quarterly earnings report further bolstered investor confidence. The company reported quarterly net sales of $30.07 billion (933.79 billion New Taiwanese dollars), up 38.6% year-over-year (Y/Y), topping the analyst consensus estimate of $30.04 billion. Net income and earnings per share were $398.27 billion New Taiwanese dollars and 15.36 New Taiwanese dollars per share (or $2.47), up by 60.7% Y/Y, topping the analyst consensus estimate of $2.37. In U.S. dollar terms, revenue growth was 44.4% Y/Y and up by 17.8% quarter-over-quarter (Q/Q) [3].

TSMC's Chairman, C.C. Wei, announced a significant increase in the company's investment in U.S. chip manufacturing in March, committing an additional $100 billion to three fabrication plants in Arizona. This new commitment comes in addition to the $65 billion previously pledged in April 2024 [3].

Morgan Stanley has maintained its "Overweight" rating for TSMC, setting a new target price of NT$1,288, implying an upside potential of 17.6%. The third quarter of 2025 could serve as a turning point for TSMC's performance, with revenue trends influencing the company's full-year growth. Depending on revenue trends, the company's full-year growth could fall into three scenarios: a 5% quarter-over-quarter rise in Q3 revenue may push annual growth beyond 30%; a moderate 0–3% rise would likely place growth around 20%; and in the most pessimistic case, a 1–3% quarterly decline would still support roughly 20% annual growth [4].

TSMC's success in reaching the $1 trillion market cap milestone is a testament to its leadership in the semiconductor industry and its ability to capitalize on the growing demand for AI technologies. As the company continues to invest in advanced process technologies and expand its manufacturing capacity, it is well-positioned to maintain its dominant position in the global technology ecosystem.

References:
[1] https://www.gurufocus.com/news/2989164/tsmc-tsm-market-cap-hits-1-trillion-amid-ai-demand-surge?r=4bf001661e6fdd88d0cd7a5659ff9748
[2] https://finance.yahoo.com/news/tsmc-joins-trillion-dollar-club-023919891.html
[3] https://finance.yahoo.com/news/nvidia-supplier-taiwan-semiconductor-roll-104315022.html
[4] https://www.ainvest.com/news/tsmc-set-report-earnings-morgan-stanley-thinks-3-factors-critical-2507/