A flood of good news hit chip stock Taiwan Semiconductor (NYSE:TSM) today, which opens up some new potential for an improved bottom line. Though the news was substantial, it was only enough to pull Taiwan Semiconductor up fractionally in Wednesday morning’s trading session. First, Taiwan Semiconductor is likely to have its access to the Chinese market preserved, as it will probably land a waiver from the United States to keep its operations going there for some time to come.
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However, that waiver will come with a price: Taiwan Semiconductor won’t be allowed to make “significant technological upgrades,” so whatever it makes right now is pretty much top-of-the-line forever. A fine start, but it gets better.
Taiwan Semiconductor is also benefiting from a rise in overall exports out of Taiwan and is likely to continue doing so. The export market for Information, Communication, and Audio-Video Products was up just short of 60% against this time last year, hitting a combined total of $8.25 billion. As the market for artificial intelligence and related products continues to rise, so too will orders at Taiwan Semiconductor. It’s already been seeing a rise in orders related to AI, and that trend is likely to continue.
Is Taiwan Semiconductor a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Strong Buy consensus rating on TSM stock based on six Buys and two Holds assigned in the past three months, as indicated by the graphic below. Furthermore, the average TSM price target of $122.50 per share implies 33.97% upside potential.
