Taiwan Semiconductor Manufacturing (NYSE:TSM | TSM Price Prediction | TSM Price Prediction) just delivered a quarter that should end the debate about who owns the AI buildout. Q1 2026 revenue hit $35.9 billion with a record 66.2% gross margin, and CEO C.C. Wei told investors that “AI-related demand continues to be extremely robust.” HPC alone now drives 61% of wafer revenue. Shares are up 26.06% YTD to $402.90. Can TSM hit $600 by 2028?
Why TSM Shares Haven’t Broken $500 Yet
TSM is down 0.41% over the past week after climbing 8.74% in the last month and 108.21% over the past year.
Some DCF models peg fair value at $215.69 to $254.08, suggesting shares trade 82.4% to 88.4% above intrinsic value. U.S.-China tensions, Iran war disruptions to chemical supplies, and a 2% to 3% gross margin drag from the N2 ramp weigh on sentiment. A beta of 1.264 amplifies moves in either direction. After a 108% one-year run, profit-taking is rational.
Wall Street Sees 15% Upside. I Think That’s Too Conservative
The consensus target sits at $463.45, with 5 Strong Buy, 12 Buy, and 2 Hold ratings. Barclays raised its target to $470 and Needham to $480 after Q1. Our own 12-month view of $473.33 implies roughly 17% upside. Every one of these targets is a 12-month number.
By 2028, TSM expects to ship A14 in volume, push N3 into Arizona and Japan, and capitalize on what management called the “multiyear AI megatrend.” Wei’s guidance for AI accelerator revenue is a mid- to high-50s CAGR through 2029. That math doesn’t fit inside a $475 target.
The Path to $600 Per Share
Reaching $600 from today’s price of $402.90 would require a gain of 48.9%. With forward EPS of $15.35, a price of $600 implies a forward P/E of 39x. Our base case of $473 already implies roughly 31x on current forward earnings, meaning the bold target requires about 8x of additional multiple expansion or equivalent EPS growth.
Q1 2026 EPS of $3.49 beat estimates by 8.39%, the eighth straight beat. Management raised full-year 2026 revenue growth guidance to above 30% and hiked 2026 CapEx to the high end of $52 to $56 billion.
Wei said cloud customers “continue to provide us with their very strong signal and positive outlook” and capacity will “continue to be very tight” through 2027. With 72.3% foundry share and over $1.2 trillion in customer data center commitments through 2028, EPS growth does the heavy lifting. If forward EPS grows 25% annually, the implied P/E at $600 drops into the high-20s. A Taiwan-Strait incident is the one tail risk that breaks this thesis.
Where TSM Trades Versus Its Earnings Power
At $402.90, TSM trades at roughly 26x forward earnings and 35x trailing, with shares near the $421.97 52-week high and well above the $186.84 low. The 10-year return of 1,612.99% shows what compounding 36% ROE buys. A 26x forward multiple on a business growing earnings 58% YoY with 58.1% operating margins is not stretched.
Is $600 Realistic? My Verdict
$600 by 2028 requires a 48.9% gain, well above Wall Street’s 12-month view. I think it’s realistic, though far from certain.
Three things need to go right: AI accelerator demand stays on the mid-50s CAGR path, N2 and A14 ramps hit their yield targets, and Taiwan’s geopolitical status quo holds. A serious Strait disruption would derail every assumption. We’ve outlined the blueprint for how Taiwan Semiconductor could reach $600 in 2028.
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