On Monday, Morgan Stanley reaffirmed its Overweight rating on Taiwan Semiconductor Manufacturing Co. Ltd. (2330:TT) (NYSE: TSM), holding steady on the NT$758.00 price target. The firm's stance comes in anticipation of Nvidia Corporation's (NASDAQ: NASDAQ:NVDA) upcoming revenue guidance, which is set to be announced on February 21, 2024. Taiwan Semiconductor Manufacturing Co. Ltd., often referred to as TSMC, is highlighted as the exclusive supplier for Nvidia's AI graphics processing units (GPUs).
The connection between TSMC's financial performance and Nvidia's guidance is underscored by the expectation that positive news from Nvidia could potentially lead to a surge in TSMC's share price. The analyst from Morgan Stanley pointed out that any upward surprise in Nvidia's April-quarter revenue guidance could serve as a significant catalyst for TSMC's stock.
The focus on Nvidia's announcement is due to the close supplier relationship with TSMC, which positions the latter to benefit from Nvidia's business outcomes. As Nvidia prepares to release its revenue guidance, investors and market watchers are likely to pay close attention to the implications for TSMC.
TSMC's role as a sole supplier for a key component of Nvidia's product line places it in a strategic position within the semiconductor industry. The company's stock performance is, therefore, closely tied to the success and demand for Nvidia's AI GPUs.
Market participants are now looking toward the February 21 disclosure from Nvidia to gauge the potential impact on TSMC's stock. The anticipation builds as the date approaches, with Morgan Stanley's reaffirmed Overweight rating and price target reflecting confidence in TSMC's prospects.
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