Mizuho raised their price target for Taiwan Semi (TSM) to TWD1,170 per share in a note Tuesday, with analysts at the firm saying it could be one of their favorite semiconductor longs.
The analysts cited the combination of valuation growth and the fact the company captures upside potential from all AI silicon designers and buyers, as well as AI on the edge "that could enhance and improve upgrade/replacement rates in the mature smartphone and PC end markets.
"AI does not happen if not for TSM and their leadership in leading edge semi production as well as rapidly expanding CoWos backend 3D packaging," which is critical for AI semiconductor designs, says Mizuho.
"TSM is up 66% YTD, and while that lags an NVDA up 150%, it is well ahead of the SMH +49% YTD, and the risk and volatility in TSM feels a lot less vs NVDA and AMD, added the firm.
They believe this is due to valuable diversification and much lower investor expectations and positioning. The firm also noted that TSM is still forecast to deliver accelerating EPS growth in 2026 compared to 2025.