Taiwan Semiconductor (TSM) Stock: The Bull Case Wall Street Can’t Ignore

TLDR

• TSM stock is up 102.41% over the past year, far outpacing the S&P 500’s 25.39% gain.
• Q1 2026 revenue hit $35.90 billion, up 35.1% year-over-year, with High-Performance Computing now 61% of total revenue.
• May monthly revenue was up 30.1% year-over-year, with five-month cumulative growth holding steady at 30%.
• Wall Street consensus EPS for FY2026 stands at $15.76, with TSMC’s stock trading at roughly $462 and a forward P/E of about 29x.
• TSM holds a Zacks Rank #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 (TSM) has had a remarkable run — up more than 100% in the past year — and some analysts say the rally may not be over yet.

Taiwan Semiconductor Manufacturing Company Limited, TSM

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

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

Wall Street’s consensus EPS estimate for FY2026 is $15.76, putting the stock at a forward P/E of roughly 29x. The semiconductor sector median sits around 33x, which some see as room for TSM to re-rate higher.

One bull case puts actual EPS closer to $18.48 for FY2026, suggesting the stock is trading at closer to 25x earnings — cheaper than it looks on the surface.

Revenue Growth Holds Steady

In Q1 2026, TSMC posted revenue of $35.90 billion, up 35.1% year-over-year. High-Performance Computing drove 61% of that revenue, while advanced nodes at 3nm, 5nm, and 7nm made up 74% of total wafer revenue.

The 3nm node alone accounted for 25% of wafer revenue — a number that underlines where TSMC’s pricing power sits.

Monthly data reinforces the trend. In May, revenue was up 30.1% year-over-year. Cumulative revenue growth over the first five months of 2026 is running at 30%.

TSMC has also revised its full-year 2026 capex toward the top end of its $52 billion to $56 billion guidance range. The company is building out capacity to keep up with order backlogs from customers including Nvidia, Apple, and AMD.

The $500 Price Target Case

CEO C.C. Wei has said global chip supply will not meet AI-driven demand for years.

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

Analyst Ratings

On Zacks, TSM holds a Rank #2 (Buy) and a Momentum Style Score of B. Over the past 60 days, two earnings estimates for FY2026 moved higher with none moving lower. The full-year consensus estimate rose from $15.10 to $15.30 over that period.

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

The average price target among those analysts is $465, implying about 0.62% upside from current levels over the next 12 months.

Weekly price performance for TSM is up 2.11%, matching the Zacks Semiconductor – Circuit Foundry industry average. Average 20-day trading volume stands at approximately 11.6 million.

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