Taiwan Semiconductor Manufacturing (TSM +1.22%) has been one of the top artificial intelligence (AI) stocks to own. TSMC holds a unique position in the chipmaking world, and that dominance has allowed the company to reach new heights.
However, I think it’s far from done setting all-time highs, and it could reach levels never before seen by the time 2027 rolls around. I think it could get all the way up to $600 per share fairly easily by the end of next year, making it a no-brainer stock to buy right now.
Image source: Taiwan Semiconductor Manufacturing Company.
TSMC is the backbone of the AI build-out
TSMC is the only reason AI technology is where it is now. It’s a chip foundry, which means clients come to it with chip designs, and it manufactures them. This is a great place to be, as it allows the company to stay neutral in the AI race and fabricate chips for competing companies (such as Nvidia and AMD). However, TSMC also has a unique position in terms of size.
Taiwan Semiconductor Manufacturing
Today’s Change
(1.22%) $5.21
Current Price
$433.24
Key Data Points
Market Cap
Day’s Range
$428.90 – $435.37
52wk Range
$257.98 – $479.00
Volume
10.6M
Avg Vol
12.7M
Gross Margin
63.08%
Dividend Yield
0.81%
During 2025, research by The Motley Fool found that TSMC accounted for over 70% of chip foundry revenue in the world. That means that if one of the major AI firms wanted to switch to a different chip foundry, it probably wouldn’t have enough production capacity to meet demand. The sheer size of TSMC versus its competition gives it a major competitive advantage, and it allows investors to easily project how TSMC will grow over the next few years, as it’s likely to grow in lockstep with AI spending increases.
Next year, Wall Street analysts expect the company’s revenue to rise 34% year over year. That suggests another fantastic year for the company, and with TSMC trading at a reasonable valuation, I think it could be in for major stock price growth.
TSMC tends to trade at around 28 times forward earnings as the year ends. Currently, the company trades at about 20 times next year’s earnings.
TSM PE Ratio (Forward 1y) data by YCharts
If TSMC can rise to 28 times forward earnings by the end of 2027, there’s about 41% upside in TSMC’s stock. At today’s $435 price tag, that indicates a $612 stock price by the end of next year. That’s great upside in one year, and given Wall Street analysts’ history of underestimating TSMC’s growth during the AI build-out, its true potential could be far higher.
Keithen Drury has positions in Nvidia and Taiwan Semiconductor Manufacturing. The Motley Fool has positions in and recommends Advanced Micro Devices, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.