TSMC: Needham Reiterates Buy Rating, Raises PT to $270

TSMC: Needham Reiterates Buy Rating, Raises PT to $270

Taiwan Semiconductor Manufacturing Company (TSMC) continues to receive favorable analyst reviews, with Needham & Company reiterating its Buy rating and raising its price target to $270. The move follows the company's strong quarterly earnings report and positive outlook for fiscal year 2025.

Needham's analyst, David Hsu, highlighted TSMC's "another strong beat-and-raise quarter," noting that the company's revenue growth outlook has been increased from 24-26% to approximately 30% for the fiscal year 2025. This positive performance was driven by a robust 18% quarter-over-quarter growth in Q2, which exceeded the company's own guidance of 13%.

Despite the strong performance, TSMC remains cautious about macroeconomic uncertainties, with implied guidance for Q4 representing a high-single-digit percentage decline quarter-over-quarter. The company also expects continued capital expenditure growth, with hints of lower capital intensity in the future.

Needham's new price target of $270 reflects the firm's anticipation of strong AI-driven growth prospects. The analyst projects revenue growth from $114 billion in 2025 to $160 billion in 2027, underscoring the company's potential in the rapidly evolving semiconductor market.

TSMC's stock has delivered a strong 21% return year-to-date, trading near its 52-week high of $238.31. This performance has been driven by the company's impressive financial health, supported by a "GREAT" financial health score from InvestingPro, with revenue growth of nearly 40% over the last twelve months.

The positive outlook from Needham aligns with recent updates from other financial analysts. Barclays has maintained an Overweight rating with a price target of $240, while Bernstein SocGen adjusted its price target to $249 from $251, citing foreign exchange pressures. Goldman Sachs increased its price target to NT$1,210, forecasting significant revenue growth driven by AI and high-performance computing.

These developments highlight the varied perspectives of analysts on TSMC's financial outlook and growth potential, with a majority of analysts maintaining a positive outlook on the company's stock.

References:
[1] https://au.investing.com/news/analyst-ratings/taiwan-semi-stock-rating-reiterated-at-buy-by-needham-on-strong-growth-93CH-3930435
[2] https://www.reddit.com/r/Daytrading/comments/1lwb8fi/all_the_market_moving_news_from_premarket_1007/