With the continuous optimism towards artificial intelligence driving its stock price to a new high, TSMC has now returned to the top ten global enterprise market capitalization after nearly four years.
The stock price of this world's largest wafer foundry surged by about 14% last week, surpassing Broadcom and Lilly at one point and ranking ninth on the global corporate market value list. Although its stock market in Taiwan, China fell by more than 2% this morning, bringing its market value back below $700 billion, it is still higher than Broadcom as a whole.
(As of last Friday's global enterprise market value ranking)
It should be noted that the last time TSMC entered the top ten global market capitalization was during the chip shortage period during the pandemic in 2020.
Undoubtedly, the enthusiasm of investors for generative AI has driven a sharp rise in global chip stocks this year, and has also made TSMC's performance almost on par with Nvidia's. TSMC is the main contract manufacturer for AI chip giants such as NVIDIA and AMD, and the market is optimistic that TSMC may become a major beneficiary of this wave of AI.
Both Morgan Stanley and JPMorgan Chase analysts recently believe that TSMC is expected to further rise due to the surge in AI related revenue and strong pricing power.
JPMorgan Chase raised TSMC's target price by 10% to NT $850 last week, stating that the stock is "a driving force behind almost all artificial intelligence processing in data centers and edges.".
Morgan Stanley analysts, including Gokul Hariharan, say that by 2027, revenue related to artificial intelligence will soar to 25%. Thanks to tightly integrated packaging technology, leading process technology, and the widest customer ecosystem, TSMC's moat in the Al semiconductor field seems to be wider than its previous product cycle.
In a report submitted on March 7th, Charlie Chan and other analysts from TSMC also stated that the demand for generative AI chips is clearly a driving force for TSMC's growth.
From the data in the options market, it is evident that investors are still quite optimistic about TSMC's future performance in the US ADR market. According to data compiled from open contracts in the industry, the ratio of put options to call options has dropped to a one month low, indicating that even though TSMC's stock price continues to hit new highs, option traders still buy more call contracts than put contracts.
Of course, behind the explosive trend of the year, the risks faced by TSMC's stock price in the short term undoubtedly also exist.
Last Friday, Nvidia's significant drop of over 10% from its peak during trading actually sounded an alarm for some investors trying to catch up with global chip stocks. Like Nvidia, TSMC also shows clear signs of overbought in terms of technical indicators. This round of gains caused TSMC's 14 day relative strength index (RSI) to exceed 82 at one point last week. By this indicator, TSMC has become one of the most severely overbought stocks in Asia.
From the perspective of market value ratio, TSMC currently accounts for 32.5% of the market value of Taiwanese stocks, which is undoubtedly a very exaggerated number. Because even Samsung, which has been involved in multiple major sectors of the Korean economy, only accounts for about 25% of the market weight in South Korea.
Interestingly, in the past few months, the Wall Street female stock goddess "Wood Sister", who had repeatedly reduced her holdings in NVIDIA, also reduced her holdings in TSMC at the end of last month after two years. For these two hot AI chip concept stocks, Mu Jie doesn't seem to be interested at the moment