Morgan Stanley has reinstated Taiwan Semiconductor Manufacturing Company (TSMC) as its top stock pick following robust artificial intelligence capital expenditures from Meta and Microsoft. The bank maintains an overweight rating on TSMC shares. Analyst Charlie Chan’s price target of NT$1,288.00 suggests a potential upside of 42% from the stock’s April 30 close of NT$908.00. TSMC shares have declined 12% this year, while its American Depositary Receipt (ADR), trading under the ticker TSM on the New York Stock Exchange, has dropped nearly 13%. Chan noted that three major concerns previously prevented TSMC from being named the top pick during recent market turbulence. However, strong AI spending by the ‘Magnificent Seven’ tech giants has alleviated these concerns. ‘With the robust AI capex guidance from Meta and Microsoft, we move TSMC back to our Top Pick,’ Chan wrote. The analyst cited the sustainability of AI demand, a potential joint venture with Intel, and U.S. tariffs on semiconductors as the primary overhangs that have now been resolved. He expects any costs from potential tariffs to be absorbed by customers, given TSMC’s substantial US$165 billion investment in the U.S., which may increase the chance of exemption. — new from CNBC
