J.P. Morgan Raises TSMC Price Target to NT$2,400 on Strong AI Demand

Global cloud providers are stepping up investment in AI infrastructure, boosting demand for TSMC’s 3-nanometer and 2-nanometer processes and CoWoS advanced packaging for high-performance computing chips. With capacity falling short of demand, the scale of TSMC’s expansion directly affects shipments by customers including Nvidia and AMD and has become central to Citi’s and Goldman Sachs’ reassessments of the chipmaker’s earnings and share price.

Reports released on July 6, 2026, showed Citi raising its TSMC price target to NT$3,800 from NT$2,875, while Goldman Sachs lifted its target to NT$3,000 from NT$2,750. Both maintained buy ratings. Citi estimates capital expenditure of $75 billion in 2027 and $80 billion in 2028, while Goldman forecasts $78 billion and $82 billion, respectively.

Growing global demand for generative AI and high-performance computing is concentrating advanced-chip orders at TSMC. As a major foundry partner to companies including NVIDIA and Apple, TSMC is running its advanced-process capacity at full utilization. Its pricing power and expansion progress have become key indicators for the global AI supply chain and Taiwanese equity valuations.

UBS sharply raised its TSMC price target to NT$3,400 in its latest report and reiterated its Buy rating, citing persistently strong momentum in AI chip demand. UBS also expects TSMC could begin another round of price increases in early 2027 to reflect cost pressures from advanced-process capacity expansion and higher capital expenditure.

TSMC benefited from advanced-chip demand fueled by generative AI, with high-performance computing and AI servers emerging as key growth engines. Its gross margin climbed to 66.2% in the first quarter of 2026, covering January through March, underscoring its lead in advanced processes, higher capacity utilization and pricing power. The market consequently raised its earnings forecasts for the next two years.

After TSMC released its first-quarter 2026 results, Daiwa Capital and Morgan Stanley raised their price targets to NT$2,330 and NT$2,588, respectively, citing expectations for continued rapid growth in AI server revenue. TSMC shares briefly hit a record NT$2,135 in early trading, helping lift Taiwan’s stock market by more than 900 points before it reversed course and fell below 38,000.