Goldman Sachs raises TSMC target 35%, driving stock to record high amid AI capacity spend
Goldman Sachs raised Taiwan Semiconductor Manufacturing Co. (TSMC) price target by 35% to NT$2,330, triggering a 6.9% intraday jump and a record high for the stock. Goldman forecasts another year of solid growth, citing AI as a multi-year demand driver and estimating TSMC will spend about $150 billion over the next three years to expand AI chip capacity. The rally boosted Taiwan’s Taiex above 30,000 for the first time and supported gains across Asian chip names, including Samsung, Tokyo Electron and Advantest; Chinese chip shares also rose after increased state fund investment in SMIC. Wall Street peers also lifted targets: Sanford C. Bernstein reiterated Outperform and set a $330 target on NY-listed TSMC; Bank of America raised its target to $360. Market focus now shifts to TSMC’s earnings report on Jan. 15 and ongoing capital expenditure plans. Key trading implications: increased investor appetite for AI-exposed chip equities, potential sector rotation into foundry and hardware suppliers, and heightened volatility ahead of earnings and capex updates.
Bullish
The news is bullish for equity markets exposed to AI and semiconductors. A 35% price-target raise from a major bank, accompanied by a projected $150 billion capex plan for AI capacity, materially improves revenue and margin expectations for TSMC and its supply chain. Historically, large upward revisions and hefty capex commitments for industry leaders (e.g., Nvidia/TMSC cycles) have triggered sector-wide rallies and rotation into suppliers and related hardware names. Short-term, expect higher trading volumes and elevated volatility as investors price in improved earnings and ahead of TSMC’s Jan. 15 results. Momentum buying can lift correlated equities (foundries, equipment makers, memory suppliers) and regional indices (Taiex). Medium-to-long-term, sustained capex and AI demand should support fundamentals—higher revenue, better margins, and continued share-price appreciation—though risks include execution of capex, geopolitical supply-chain constraints, and valuation-driven pullbacks. Traders should watch earnings, capex guidance, and order-book indicators for confirmation; consider position sizing to account for possible short-term corrections after rapid gains.