After Goldman Sachs significantly raised its target price, TSMC's stock surged 7%, marking the largest increase in eight months.

After Goldman Sachs significantly raised its target price, TSMC's stock surged 7%, marking the largest increase in eight months.

On Monday, January 5, TSMC’s stock price surged as much as 6.9%, marking the largest single-day gain since April last year, with shares reaching a new high and driving the Taiwan Stock Exchange Weighted Index past the 30,000-point mark. This rally came after Goldman Sachs raised the company’s target price by 35% to NT$2,330, further strengthening market confidence in long-term growth driven by artificial intelligence-related demand.

Goldman Sachs analyst Bruce Lu pointed out in his report that TSMC is expected to invest about $150 billion over the next three years to expand capacity, while its profit margins continue to improve. The bank emphasized that artificial intelligence has become the “engine of growth for TSMC over the coming years.”

TSMC’s leading performance has driven the entire Asian technology sector higher. Samsung Electronics in South Korea rose more than 7%, SK Hynix also rallied nearly 3%, and the strong performances of these two major memory companies directly boosted market sentiment, with the Seoul Composite Index closing up 3.43%, a record high close. Although some investors remain cautious about short-term industry fluctuations, the semiconductor sector became the primary driver in Asian markets today.

The Taiwan Stock Exchange Weighted Index closed up 2.6% at 30,105.04 points, rising for the third consecutive trading day and posting the biggest single-day gain since November 20 last year.

 

TSMC Leads Taiwan Stocks to Record Highs

TSMC is the main force driving the rise of the Taiwan Stock Exchange Weighted Index. Of the 1,050 stocks traded today, only 246 closed higher, while 741 declined; among 28 industry sectors, only 11 sectors rose, with semiconductors leading the market.

In 2025, TSMC’s stock price rose 44% for the year, and its market capitalization broke the $1 trillion mark for the first time, highlighting recognition of its irreplaceable position in the AI industry chain. As the key foundry for many global chip companies, its scale and technological advantage have created substantial industry barriers.

Sanford C. Bernstein analyst Mark Li stated in his latest report, "When it comes to leading-edge semiconductor processes, capacity is king for TSMC." The report advises investors to “focus on high-quality targets” in today’s environment of valuation concerns, and stresses that the main market trend for 2026 “will still revolve completely around AI.”

Valuation Supports Asian Stock Markets

Compared to global peers, valuation has become the key factor supporting Asian stock performance. Currently, the price-to-earnings ratio (P/E) of the Asian technology hardware companies index is 16 times, significantly lower than the Nasdaq 100 index’s 25 times.

TSMC will release its financial report on January 15. Despite Juan Ching-hwa’s comments to legislators this week, stating that given TSMC’s dominant position in the market, he “hopes to see a more balanced industry structure,” the market remains optimistic about its prospects.

Bernstein expects TSMC’s revenue will grow by 23% in 2026 and 20% in 2027, with compound annual growth rate for earnings per share of about 20%, slightly lower than revenue growth. The firm lists TSMC as its top pick in the sector, believing it has comprehensive advantages in quality, risk control, and valuation.

Goldman Sachs analysts further note that even as TSMC plans to invest about $150 billion to expand advanced process capacity over the next three years, its profit margin structure continues to improve. This underscores TSMC’s strong pricing power and sustainable competitive advantage in AI chip manufacturing.

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