Nvidia, Apple Supplier TSMC Stock Surges In Pre-Market After Morgan Stanley Raises Price Target Ahead Of Earnings

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Taiwan Semiconductor Manufacturing Co. TSM saw a pre-market boost on Monday after Morgan Stanley joined a growing list of brokers raising their price targets on the chipmaker ahead of its earnings report.

What Happened: In the U.S., TSM shares were trading at $190.92, a 3.77% increase from its Friday close of $183.99, as per Benzinga Pro. Meanwhile, TSMC’s shares in Taipei leaped as much as 4.5%, pushing its year-to-date rally to over 75%.

Morgan Stanley upped its target on the stock by roughly 9%, predicting that TSMC will raise its full-year sales forecast in the upcoming earnings announcement, Bloomberg reported. The brokerage also anticipates TSMC to increase wafer prices due to its robust bargaining power.

“TSMC’s ‘hunger marketing’ strategy appears to be effective,” Morgan Stanley analysts, including Charlie Chan, noted on Sunday. They also mentioned that TSMC is conveying a message that leading-edge foundry supply could be tight in 2025, and customers may not get sufficient capacity allocation without recognizing TSMC’s value.

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Analysts from JPMorgan, including Gokul Hariharan, also expect the company to raise its revenue guidance during the earnings call.

“We anticipate TSMC to sound more optimistic on AI accelerator demand,” Hariharan wrote in a Sunday note.

Morgan Stanley and JPMorgan join brokers like Nomura Holdings Inc. and Mizuho Securities Co. in expressing optimism about TSMC leading into its second-quarter results. The chipmaker, whose products are used by companies such as Apple Inc. AAPL and Nvidia Corp. NVDA, is expected to report a 36% revenue growth from a year earlier, marking the fastest pace since the fourth quarter of 2022.

Why It Matters: TSMC’s robust performance is backed by a strong demand for AI applications. The company’s expansion into AI and 2nm technology has also been a key growth driver, as noted by UBS.

Furthermore, TSMC is set to reach the $1 trillion market capitalization mark, fueled by a stock rally and potential price increases. The company’s growth is propelled by the rising demand for AI-related products, making it a key player in the trillion-dollar club.

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This story was generated using Benzinga Neuro and edited by Pooja Rajkumari

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