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Investing.com - Huatai Financial raised its price target on Taiwan Semi (NYSE:TSM) to $320 from $300 while maintaining a Buy rating following the analyst firm’s attendance at SEMICON Taiwan 2025. The stock, currently trading at $262.79, sits near its 52-week high of $266.44, reflecting strong momentum for the $1.1 trillion semiconductor giant. According to InvestingPro, TSM maintains a "GREAT" overall financial health score, with particularly strong marks in profitability and price momentum.
The firm highlighted that Taiwan Semi’s profitability and average selling prices have risen rapidly over the past five years, with the gap between the company and its competitors widening significantly since entering the N3 node. This is evidenced by the company’s impressive 58.58% gross profit margin and 39.48% revenue growth over the last twelve months. Huatai noted a symbiotic relationship between Taiwan Semi’s pricing power on advanced processes and customer profitability, with the company benefiting from rapid profitability expansion of clients like Nvidia.
Huatai identified advanced packaging as another core growth engine for Taiwan Semi beyond advanced process technology, expressing positive views on both revenue growth and profitability in this segment. The firm also expressed confidence in the company’s pricing power in the U.S. market, suggesting that gross profit margin dilution from overseas fabrication facilities may be limited.
Despite U.S. policy headwinds affecting operations in mainland China, Huatai observed that demand remains robust in the region and expects Taiwan Semi’s revenue to maintain steady growth there. Get deeper insights into TSM’s growth prospects and comprehensive financial analysis with a InvestingPro subscription, which includes exclusive ProTips and detailed research reports.
Huatai maintained its attributable net profit forecasts for Taiwan Semi at TWD1,528 billion for 2025 (up 30.2% year-over-year), TWD1,820 billion for 2026 (up 19.1%), and TWD2,156 billion for 2027 (up 18.5%), with the new price target based on 25 times 2026 estimated price-to-earnings ratio. The stock currently trades at a P/E of 22.97, while analyst targets range from $210 to $325, with a strong buy consensus rating of 1.44.
In other recent news, Taiwan Semiconductor Manufacturing Company (TSMC) reported a robust second quarter for 2025, showcasing a significant 60.7% increase in earnings per share, reaching NT$15.36. The company’s revenue also saw an 11.3% sequential rise to NT$30.1 billion, fueled by strong demand in the high-performance computing and smartphone sectors. Despite a minor decrease in gross margin, TSMC improved its operating margin and maintained a strong return on equity. Additionally, Bernstein SocGen Group raised its price target for TSMC to $290 from $249, while keeping an Outperform rating. This adjustment was attributed to an optimistic outlook on artificial intelligence, with expectations of a 33% revenue growth in U.S. dollars this year. These developments highlight TSMC’s strategic positioning in the evolving tech landscape.
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