In a report released today, Krish Sankar from TD Cowen maintained a Hold rating on TSMC (TSM – Research Report), with a price target of $215.00.
Krish Sankar’s rating is based on TSMC’s strategic decision to increase its investment in the United States by $100 billion, which is seen as a relatively low-risk operational move compared to other alternatives. The planned investment includes the construction of additional semiconductor fabs and advanced packaging facilities, aligning with the U.S. government’s semiconductor on-shoring goals. However, the timing of these investments remains uncertain, which adds a layer of unpredictability to the overall strategy.
Despite the uncertainty in timing, the capital expenditure intensity is expected to remain manageable, supported by long-term growth prospects and potential offsets from spending in Taiwan. The yields from TSMC’s first Arizona fab have been positive, suggesting that the expansion could proceed smoothly. Nevertheless, the lack of clarity on equipment installation and additional funding sources, such as the CHIPS Act, contributes to the Hold rating, as these factors could impact the financial outlook and execution of the investment plan.
According to TipRanks, Sankar is a 5-star analyst with an average return of 14.8% and a 51.67% success rate. Sankar covers the Technology sector, focusing on stocks such as Lam Research, Micron, and Apple.