Taiwan Semiconductor Manufacturing Co. (NYSE:TSM) shares surged by their most since April on Monday, as the world’s largest contract chipmaker entered the new year riding a wave of relentless optimism over artificial intelligence demand.
Shares of the primary manufacturer for Nvidia Corp. and Apple jumped as much as 6.9% to reach a fresh record high in Taipei.
The rally was ignited by Goldman Sachs Group, which raised its price target for TSMC by 35% to NT$2,330, signaling expectations for another year of "structural growth" fueled by the exponential consumption of AI computing power.
The surge propelled Taiwan’s benchmark Taiex index above the 30,000-point milestone for the first time in history.
Juan Ching-hwa, Taiwan’s deputy finance minister, noted that such a level “seemed almost impossible” until recently, though he expressed hopes for a more balanced market structure given TSMC’s massive weighting.
In a report to clients, Goldman Sachs analysts led by Bruce Lu described AI as a “multi-year growth engine” for the Hsinchu-based firm.
The bank projects that TSMC will deploy over $150 billion in capital expenditures between 2026 and 2028 to expand capacity and maintain its lead in 2nm and 3nm processes.
“We expect TSMC’s profit margins to continue improving despite heavy investment,” Lu wrote, noting that capacity for high-end AI chips is expected to remain tight through 2027.
The momentum in Taipei spread across the Asian semiconductor sector.
Japanese equipment makers Tokyo Electron Ltd. and Advantest Corp. both advanced more than 7%, while South Korea’s Samsung Electronics Co. extended its winning streak to a fifth session.
In China, chip stocks found support after the state-backed integrated circuit fund increased its stake in Semiconductor Manufacturing International Corp. (SMIC).
TSMC is scheduled to report its quarterly earnings on Jan. 15, an event that will provide the first major test for the sector's valuation after a blockbuster 2025 in which TSMC’s market value crossed the $1 trillion mark.
While some analysts warn of potential overheating, the current market sentiment remains dominated by a "fear of missing out" on the next leg of the AI cycle.
The rally also coincides with a surge in capital market activity in the region, with roughly 11 AI-related firms preparing to list in Hong Kong this month, seeking to raise up to $4.1 billion.