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One of the Most Important AI Stocks Isn’t Nvidia. It’s TSMC

Nvidia grabs the AI headlines, but every leading-edge chip it sells has to pass through one company's factories first, and that company trades at a fraction of its biggest customer's valuation.

By Vandita Jadeja
Published October 9, 2026, 12:00pm ET · 3 min read

Price Targets desk. Editor: Vandita Jadeja.

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A red stylized 'tsmc' logo is centered over a white circular graphic resembling a silicon wafer, which features a black grid pattern. Some squares within the grid are filled black, creating an abstract design. The entire composition is set against a solid dark red background, with a thin, horizontal red bar at the very bottom.
The distinctive TSMC logo, featuring the stylized red text over a silicon wafer graphic, symbolizes the company's crucial role in advanced semiconductor manufacturing. This imagery highlights TSMC's position as a cornerstone of the burgeoning AI industry and a significant investment focus. © Taiwan Semiconductor

Our 24/7 Wall St. price target for Taiwan Semiconductor Manufacturing (NYSE:TSM | TSM Price Prediction) is $552.36. With shares at $472.36, that points to 16.9% upside over the next 12 months.

Metric Value
Current Price $472.36
24/7 Wall St. Price Target $552.36
Upside/Downside 16.9%
Recommendation BUY
Confidence Level 90%

TSMC earns a buy rating with high confidence in this model. NVIDIA (NASDAQ:NVDA) gets most of the AI headlines, but nearly every leading-edge accelerator, including Nvidia’s own, goes through TSMC’s fabs first. That role as the toll collector on AI silicon is the center of our thesis.

TSM price target

A 2nm Ramp and 53% Revenue Growth Keep TSMC Near 52-Week Highs

Shares rose 3.37% over the past week and 10.42% over the past month, and they are up 56.63% year to date. The stock sits 3.1% below its 52-week high of $487.47 and 78.7% above its low.

Second-quarter EPS of $4.31 beat the $3.887 estimate. Revenue rose 36% to $40.20B, and gross margin reached 67.7%. August revenue then grew 53.3% year over year. Management lifted full-year growth guidance to “slightly above 40%” and raised 2026 capex to $60 billion to $64 billion.

An infographic titled 'TSM · NYSE 12-Month Price Prediction' by 24/7 Wall St. The call section shows the current price of $472.36 with an arrow pointing to a target price of $552.36, labeled 'BUY +16.9%' with 'High Confidence (90%)'. The 'How We Got There' section lists 'Trailing P/E-Based Price: $482.30', 'Forward P/E-Based Price: $430.99', and 'Analyst Consensus Price: $478.23', all contributing to a 'Weighted Base: $478.23'. 'Our Adjustments' shows bars with percentages: 'Sector Momentum: +15%', 'Analyst Consensus: +5.7%', 'Earnings Growth: +3%', 'Social Sentiment: +1.3%', leading to a 'Final Target: $552.36'. Below, the 'BULL CASE: What Could Go Right' box lists points like 'AI demand robust, HPC +20% QoQ', '53% YoY revenue growth in August', 'A14 volume production scheduled for 2028', and 'Target: $612 (at 30x Forward EPS)'. The 'BEAR CASE: What Could Go Wrong' box lists '2nm ramp margin dilution (3-4 pp)', 'Cross-strait tensions, geopolitical risk', 'Currency moves & heavy capex', and 'Target: $367 (at 18x Forward EPS)'. The bottom line states 'BUY → $552.36 (+16.9%)' and a concluding statement about pricing power and AI-driven demand.
24/7 Wall St.

Why Bulls See $612 Within Reach

Management sees demand staying strong “all the way to probably 2029, 2030”. Advanced packaging capacity is still tight, and A14 volume production is scheduled for 2028.

The consensus target of $555.01 is supported by 6 Strong Buy and 14 Buy ratings. If the market pays 30x forward EPS, the stock would reach $612, about 29.5% above today’s price.

TSM analyst ratings

Margin Dilution and Taiwan Risk Could Cap Gains

Management expects the 2nm ramp to reduce gross margin by about 3 to 4 percentage points, and third-quarter guidance calls for 65-67%. Cross-strait tensions, currency moves and heavy capex add further risk.

If the multiple contracted to 18x, shares would fall to $367, a 22.3% decline. On the other side, that same guidance still implies strong margins.

TSM price scenario

TSMC Trades Cheaper Than Its Biggest AI Customers

Nvidia is TSMC’s top customer. It trades at 25x forward earnings while revenue grew 105.9%.

Broadcom (NASDAQ:AVGO), a major custom-silicon customer, trades at 19x with AI semiconductor revenue up 221%.

Intel (NASDAQ:INTC), TSMC’s main foundry rival, recorded a $2.1 billion quarterly foundry loss, which shows how hard TSMC’s lead is to copy.

Company Forward P/E Quarterly Revenue Growth YoY
TSMC 21x 36%
Nvidia 25x 106%
Broadcom 19x 86%

TSMC grows more slowly than its customers but takes a cut from every one of them. Next to these peers, the 24/7 Wall St. price target looks reasonable.

TSMC’s Risk-Reward Leans Positive

A 24/7 Wall St. price target of $552.36 comes with a buy rating and 90% confidence. What tips the scale is pricing power on leading-edge nodes that no competitor can yet match.

The setup looks strongest if the 2nm reduction stays within guidance and packaging capacity catches up. It weakens if Taiwan tensions rise or hyperscalers cut AI spending.

Here is where our model projects TSMC could trade if current growth trends and market conditions hold.

Year 24/7 Wall St. Price Target
2026 $492
2027 $580
2028 $684
2029 $787
2030 $881

These projections assume TSMC keeps performing toward its long-term revenue CAGR target of about 25%.

A Taiwan Strait shock or an AI capex slowdown could produce major downside. The flip side is that the biggest winners in AI silicon tend to share a few early characteristics, something we broke down in a free playbook on the next Nvidia.

Contact [email protected] for any questions or corrections.

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Vandita Jadeja

Vandita Jadeja is a financial publisher with over a decade of experience writing about financial topics, including investment, savings, retirement, insurance and banking. Vandita is a Chartered Accountant who loves to debunk financial concepts for readers.

Her work has appeared on sites that include The Motley Fool, InvestorPlace, and Benzinga. She covers investing and focuses on stock picks and price prediction for 24/7 Wall St.

When not looking for the next stock investment opportunity, she can be found traveling, reading, chasing sunsets and enjoying her iced latte.

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