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Investing.com - BofA Securities raised its price target on Taiwan Semiconductor Manufacturing Co. Ltd. (2330:TT) (NYSE:TSM) to NT$1,280.00 from NT$1,250.00 while maintaining a Buy rating on the stock.
The price target increase comes despite BofA trimming its 2025-2027 earnings estimates by 3.2-5.3% to reflect gross profit margin pressure driven by foreign exchange rates. The firm noted that stronger AI ASIC/GPU orders are helping to cushion this downside impact.
BofA analyst Brad Lin indicated that while rapid Taiwan dollar appreciation poses short-term headwinds to gross profit margin and non-operating income, these factors do not change the long-term structural positives for TSMC.
The new price target represents a shift to a valuation based on 20x 2026 estimated price-to-earnings ratio, compared to the previous target which used 20x 2025/26 estimates. BofA cited TSMC’s structural advantages, technology leadership, and solid customer demand as justification for the new target.
Key focus areas for TSMC’s upcoming second quarter 2025 earnings include AI demand and advanced packaging outlook, initial 2026 pricing strategy amid U.S. trade actions and currency volatility, N2 adoption plans, and U.S. investment plans under the One Big Beautiful Bill Act.
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