Taiwan Semi stock price target raised to $360 by Needham on strong AI outlook

Investing.com - Needham has raised its price target on Taiwan Semiconductor Manufacturing Company (NYSE:TSM) to $360 from $270 while maintaining a Buy rating, following the company’s strong third-quarter performance. The semiconductor giant, currently trading at $304.71 and commanding a market cap of $1.21 trillion, has seen its shares surge 55.59% year-to-date. For deeper insights into TSM’s valuation and growth prospects, check out the comprehensive InvestingPro Research Report.

Taiwan Semi reported revenue above the high end of its guidance range for the third quarter of 2025, with gross margin reaching 59.5%, despite previous concerns about foreign exchange-driven margin erosion. The company maintains strong financial health, earning a "GREAT" overall score of 3.55 on InvestingPro’s comprehensive assessment framework.

The company guided fourth-quarter revenue to decrease by only 1% quarter-over-quarter, significantly better than the previously implied 10% decline, while maintaining a 60% gross margin. Management also raised its full-year 2025 revenue growth forecast from approximately 30% to 35% and narrowed its capital expenditure guidance to $40-42 billion from $38-42 billion.

Needham highlighted several key themes from Taiwan Semi’s earnings call, including the company’s emphasis on capital discipline, with capital intensity expected to trend lower in coming years and no plans to add more greenfield capacity on N5/N3 nodes.

The firm noted Taiwan Semi’s AI outlook is "incrementally stronger" even with the China AI market remaining closed, while its Arizona facility expansion is accelerating with plans to acquire more land, accelerate N2 node implementation, and initially leverage Amkor Technology for packaging Arizona-produced wafers.

In other recent news, Taiwan Semiconductor Manufacturing Co. (TSMC) reported strong financial results for the third quarter of 2025. The company achieved a revenue of $33.1 billion, reflecting a 10.1% increase from the previous quarter. Additionally, TSMC experienced a notable year-over-year earnings per share (EPS) increase of 39%. Despite these positive financial outcomes, the company’s stock price remained unchanged in the extended session. These recent developments underscore TSMC’s ongoing growth and financial performance.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.