The boom in demand for artificial intelligence leads back to this global chip supplier, according to Susquehanna. Analyst Mehdi Hosseini upped his estimates on the semiconductor manufacturer Taiwan Semiconductor Manufacturing as wafer average selling prices improve, saying “all AI roads originate from TSM.” TSM YTD mountain Taiwan Semiconductor shares this year “In a nutshell, we argue the real re-rating has not even begun since TSM is the only viable solution for the manufacturing of key AI components, while the overall 2025 demand picture (outside of AI) is also constructive following nearly two years of inventory correction,” he wrote. The firm joins JPMorgan in asserting that “all AI roads” lead to the global chipmaker. Similar to its peer, Susquehanna views Taiwan Semiconductor shares as undervalued as the stock currently trades at 21 times forward price to earnings versus 31 times for the broader VanEck Semiconductor Index (SMH) . Taiwan Semiconductor is coming off a strong start to 2024. U.S.-listed shares have rallied 34% this year, and the chip manufacturer has triumphed as the second-best performer in the SMH due to ongoing bets on AI. Taiwan Semiconductor, a supplier to chip giants such as Nvidia , Advanced Micro Devices and Qualcomm , could rally another 27% based on the firm’s $180 price target. Underpinning this bullish call is a bet that more customers will require leading edge tools for new AI products. Given this, and the expectation for strong wafer shipments, Hosseini estimates first-quarter revenue will come in toward the top of the company’s range. Second-quarter revenue appears to be up 6% to 8% quarter over quarter, he added. “Looking forward, we expect more positive news to emerge throughout the year, helping with incremental confidence with EPS power of $10,” he said.
