TSMC shares (NYSE: TSM) are trading at $441 today, representing a 38 percent gain year-to-date, although a bullish hike in target from BofA implies an additional 34 percent upside from current levels. The move reflects growing conviction among Wall Street analysts that the AI semiconductor cycle is entering a multi-year expansion phase rather than approaching a near-term peak.
Bank of America has raised its price target on Taiwan Semiconductor Manufacturing Company to $590 from $490, maintaining a Buy rating as the firm dramatically increases its revenue growth expectations for 2026 and 2027 based on accelerating demand for artificial intelligence chips and advanced packaging capacity.
A View From Wall Street
BofA analyst now expects TSMC to achieve 40 percent year-over-year revenue growth in 2026 and 39 percent in 2027, up substantially from previous forecasts. The revised outlook incorporates what the firm describes as much stronger CPU demand alongside continued AI GPU and ASIC growth, driven by the emergence of “agentic AI” workloads that require more intensive and continuous compute resources.
The upgrade positions TSMC as a primary beneficiary of evolving AI infrastructure requirements that extend beyond graphics processing units into central processing units, custom accelerators, and sophisticated packaging technologies. Advanced front-end manufacturing at the 3-nanometer and 2-nanometer nodes, combined with back-end packaging solutions including CoWoS and InFO technologies, are expected to operate at high utilization rates as hyperscalers and chip designers compete for limited capacity.
TSMC’s dominance in both leading-edge chip manufacturing and advanced packaging creates what analysts describe as a strategic bottleneck in the AI supply chain. The company serves as the exclusive or primary manufacturer for NVIDIA’s AI accelerators, AMD’s high-performance computing chips, Apple’s mobile processors, and custom silicon from major cloud providers. This positioning has enabled TSMC to implement price increases on advanced nodes while maintaining strong demand, supporting the company’s stated goal of lifting long-term gross margins above 56 percent.
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Analysts Remain Bullish
The BofA upgrade follows similar moves from other major investment banks. Susquehanna recently raised its TSMC target to $575, while Goldman Sachs and Bernstein have issued substantial increases in recent quarters, all citing AI-driven demand and capacity constraints as key factors. The clustering of bullish calls around similar price levels suggests a broader reassessment of TSMC’s earnings power across the sell-side community.
The revised growth trajectory for 2026 and 2027 exceeds TSMC’s own guidance and consensus estimates, reflecting BofA’s view that current models underestimate the scale and duration of AI-related semiconductor demand. Agentic AI systems, which operate autonomously and continuously rather than responding to discrete user prompts, are expected to require significantly more processing power across both training and inference workloads, expanding the total addressable market for advanced semiconductors.
TSMC shares have doubled over the past 12 months, and have been one of the best tech stocks in Asia over recent years. If the latest calls from the street are right, there is an expectation that this outperformance could be here to stay into the coming year.
