Why Taiwan Semiconductor Manufacturing Stock Jumped Today

Shares of Taiwan Semiconductor Manufacturing (NYSE: TSM) (TSMC) rose on Wednesday, finishing the day up 4%. The jump comes as the S&P 500 gained 0.4% and the Nasdaq Composite gained 0.9%.

The semiconductor giant's stock got a boost after an analyst raised his price target on the stock.

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Needham raises its target

Charles Shi, an analyst at Needham, reiterated his buy rating on Tuesday on TSMC's stock, raising his price target from $225 to $270. The analyst believes the company's AI revenue will continue to explode, rising from $26 billion this year to $46 billion in 2027.

Shi expects TSMC's dominance to continue, saying, "We expect TSMC's foundry business to strengthen as we do not foresee a competitive challenge for the next several years."

Image source: Getty Images.

Intel may be shutting down part of its fabrication operation

That sentiment looks right on the money after it was reported today that Intel is considering shutting down a part of its fabrication efforts in favor of its next-generation fabrication capacity. If the company shuts down its 1.8 nanometer fabrication, the current industry standard, it would leave TSMC with essentially no rival until Intel's 1.4 nanometer fabrication can get off the ground.

TSMC is in a solid position

The company is clearly the global leader in semiconducting fabrication, especially that of hyper-advanced artificial intelligence-powering chips. That is a business not easily disrupted; TSMC has a substantial moat protecting it. I think the stock is a great pick.

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Johnny Rice has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Intel and Taiwan Semiconductor Manufacturing. The Motley Fool recommends the following options: short August 2025 $24 calls on Intel. The Motley Fool has a disclosure policy.