Taiwan Semiconductor Manufacturing Co. (TSM), or TSMC, the world’s leading contract chip maker, has drawn strong investor attention ahead of its Q3 earnings report due later today. The company’s American depositary receipts (ADRs) have surged 56% so far this year, outpacing the 38% rise in its Taipei-listed shares, as investors bet that TSMC will remain a key winner in the global AI chip boom. Therefore, TSMC’s ADRs now trade at their highest premium to local shares since 2002, based on a 50-day moving average.
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The rally reflects growing confidence in the company’s ability to lead the next phase of AI-driven semiconductor demand. A fund manager at Capital Investment Trust said, “We are positive on TSMC’s outlook and expect it to raise its full-year 2025 sales growth forecast.”
Analysts Expect a Bullish Tone on AI Demand
During the earnings call, analysts expect TSM to sound upbeat on data center and AI chip demand, supported by strong orders from major customers such as Apple (AAPL) and Nvidia (NVDA). JPMorgan (JPM) analyst Gokul Hariharan believes the company will highlight continued tight supply for its 3-nanometer and 5-nanometer wafers, which power the latest Apple iPhones and Nvidia Blackwell GPUs.
Investor sentiment was also boosted after Broadcom (AVGO), one of $TSM’s largest clients, announced a new partnership with OpenAI, signaling robust demand for high-performance computing chips.
Adding to the upbeat tone, ASML Holding (ASML) posted strong Q3 results, showing steady AI-driven demand for chipmaking tools, a positive sign for TSM’s long-term growth.
Is TSM a Buy, Sell, or Hold?
Turning to Wall Street, TSM has a Strong Buy consensus rating based on eight Buys and one Hold assigned in the last three months. At $308, the average TSMC price target implies 1.08% upside potential.
