Taiwan Semiconductor (TSM) Stocks: The Bullish Case Wall Street Can’t Ignore

TLDR

• TSM stock is up 102.41% over the past year, far outpacing the S&P 500’s gain of 25.39%.
• Q1 2026 revenue reached $35.90 billion, an increase of 35.1% year over year, and HPC now represents 61% of total revenue.
• Monthly revenue for May rose 30.1% year over year, with five-month cumulative growth holding steady at 30%.
• The Wall Street consensus is for fiscal 2026 EPS at $15.76, with TSMC shares trading at roughly $462 and a forward EPS of about 29 times.
• TSM carries a Zacks Rank of #2 (Buy) and a Momentum Style Score of B; Wall Street has a strong Buy consensus with an average price target of $465.

---

Taiwan Semiconductor Corp. (TSM) has been on a remarkable rise — up more than 100% in the past year — and some analysts say the rally may not be over yet.

Taiwan Semiconductor Manufacturing Co., Ltd., TSM

TSM stock is currently trading at around $462. Over the past three months, the stock has risen 24.27%, and is up 102.41% over the past year. The S&P 500 is up just 25.39% over the same period.

One analyst now argues TSM The stock could reach $500, citing what they see as undervalued earnings power and a structural monopoly in advanced chip manufacturing.

Wall Street’s consensus EPS estimate for fiscal 2026 is $15.76, which puts the stock at a forward P/E of roughly 29x. The semiconductor sector average is around 33x, which some see as room for TSM’s valuation to move higher.

One bullish case puts actual EPS closer to $18.48 for fiscal 2026, suggesting the stock is trading at closer to 25 times earnings — cheaper than it appears on the surface.

Revenue growth is steady

In the first quarter of 2026, TSMC recorded revenue of $35.90 billion, up 35.1% year-on-year. High-performance computing generated 61% of that revenue, while advanced 3nm, 5nm and 7nm nodes accounted for 74% of total chip revenue.

The 3nm node alone represents 25% of chip revenue – a figure that underscores where TSMC’s pricing power lies.

Monthly data reinforces this trend. In May, revenue rose 30.1% year over year. Cumulative revenue growth over the first five months of 2026 reaches 30%.

TSMC It also revised its full-year 2026 capital expenditures towards the high end of its guidance range of $52 billion to $56 billion. The company is building capacity to keep up with a backlog of orders from customers including Nvidia, Apple and AMD.

Case price target of $500

Global chip supplies will not meet AI-driven demand for years, CEO CC Wei said.

The company is expanding production through new factories in Taiwan, Arizona and Japan. It is also developing Chip-on-Panel-on-Substrate (CoPoS) packaging technology to meet the requirements of next-generation AI processors.

Analyst ratings

On Zacks, TSM carries a Rank #2 (Buy) and a Momentum Style Score of B. Over the past 60 days, two earnings estimates for fiscal 2026 have moved higher without either moving lower. The full-year consensus estimate rose from $15.10 to $15.30 during that period.

On Wall Street, TSM has a Strong Buy consensus based on five Buy ratings and one Hold. No analyst currently rates it as a Sell.

The average price target among these analysts is $465, which implies an upside of approximately 0.62% from current levels over the next 12 months.

TSM’s weekly price performance increased by 2.11%, which is in line with the Zacks industry average for Semiconductor – Circuit Foundry. The average 20-day trading volume is around 11.6 million.