JPMorgan cuts TSMC stock price target

Investing.com -- JPMorgan revised its price target for Taiwan Semiconductor Manufacturing Company (TSMC) shares, lowering it to NT$1,300 from a previous estimate.

The adjustment comes amid expectations of a healthy second quarter in 2025, with projected quarter-over-quarter growth of 5-8%, driven by robust demand for N4/N5 and N3 technologies, rush orders in older nodes, and continued expansion in advanced packaging.

Despite the positive outlook for the second quarter, JPMorgan analysts suggest that TSMC might reduce its full-year 2025 revenue guidance to a low-mid 20% range, a decrease from the earlier mid-20% range. This more cautious stance is attributed to potential impacts from tariffs and a global economic slowdown. JPMorgan estimates a 23% revenue growth in USD terms for the fiscal year 2025.

TSMC’s stock has faced several pressures over the past two months, including speculation about a joint venture with Intel (NASDAQ:INTC), potential margin impacts from increased investment in the United States, a slowdown in datacenter AI demand, and the effects of tariffs on end demand.

JPMorgan anticipates that TSMC will maintain its long-term datacenter AI growth guidance, with a mid-40% compound annual growth rate (CAGR) into 2029, while also addressing concerns about the incremental margin impact of its U.S. investments.

The semiconductor giant is expected to refrain from commenting on the potential Intel joint venture due to the variety of possible outcomes but will likely acknowledge some moderation in growth due to tariffs and the global economic slowdown. Nevertheless, TSMC is projected to uphold its long-term 20% CAGR into 2029.

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JPMorgan has revised its earnings per share (EPS) estimates for TSMC for fiscal years 2025, 2026, and 2027, reducing them by 4%, 12%, and 4%, respectively. The forecast reflects anticipated weaker demand growth, especially in non-AI categories, with the most significant impact expected in 2026.

Despite the downward revision in EPS estimates and the price target, JPMorgan analysts suggest that TSMC’s stock has largely factored in the current downturn and could potentially experience a short-term rebound of 20-25%.

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