Name TSMC! Super shocking target price exposed, foreign investors shout "5,000 yuan"

TSMC. (Bloomberg file photo)

[Financial Channel/Comprehensive Report] TSMC is favored by foreign investors again! Investment institution Aletheia Capital raised the target price of TSMC, setting the target price of Taiwan stocks at 5,000 yuan, and raised the target price of American Depository Receipts (ADR) to US$1,000, and maintained a "buy" rating.

Global financial information platform "Investing.com" reported that Aletheia Capital expects that TSMC's growth rate will continue to remain above 40% from fiscal 2026 to 2028, which means that earnings per share (EPS) during this period is expected to more than double. This increase in the target price is based on a price-to-earnings ratio of 20 times Taiwanese stocks' earnings per share for fiscal year 2028 and a price-to-earnings ratio of 25 times for ADRs.

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InvestingPro analysis pointed out that based on the current stock price, TSMC is still undervalued. Last Friday (16th), TSMC ADR dropped by 9.64 US dollars, 2.28%, to close at 412.61 US dollars. In the Taiwan stock performance section, TSMC opened at 2,395 yuan today (19th). By around 9:45 Taipei time, it fell 20 yuan, or 0.83%, to 2,400 yuan.

Aletheia Capital is optimistic about TSMC's market outlook, mainly based on factors such as continued growth in AI demand and capacity expansion. The agency estimates that shipments of artificial intelligence (AI) accelerators and central processing units (CPUs) will grow by 50% to 60% in 2027 and 2028. Coupled with TSMC's continued expansion of advanced process and advanced packaging production capacity, it is expected to further boost operating performance.

The report predicts that TSMC's advanced process production capacity will expand to 2.5 times from 2026 to 2028, and its advanced packaging production capacity will nearly triple.

In addition, TSMC has begun evaluating other locations in central and southern Taiwan and Texas, the United States, as possible locations for future plant expansion. TSMC is still included in Aletheia Capital’s Alpha portfolio.

In addition, TSMC recently held a press conference and announced its third quarter financial report. The consolidated revenue was approximately 1.49424 billion yuan, the net profit after tax was approximately 763.06 billion yuan, and the earnings per share was 29.43 yuan (equivalent to US$4.60 per unit of American depositary receipts).

Compared with the same period last year, revenue in the third quarter of 2026 increased by 50.9%, and both net income after tax and earnings per share increased by 68.7%. Compared with the previous quarter, revenue in the third quarter of 2026 increased by 17.6%, and net income after tax increased by 8.0%.

If calculated in US dollars, revenue in the third quarter of 2026 was US$46.72 billion, an increase of 41.2% from the same period last year and an increase of 16.2% from the previous quarter. In the third quarter of 2026, the gross profit margin was 66.4%, the operating profit margin was 58.7%, and the after-tax net profit margin was 51.1%.

Based on the above, Aletheia Capital maintains a "buy" rating on TSMC, setting a target price of 5,000 yuan for Taiwanese stocks and $1,000 for ADRs, and expects earnings per share to more than double from 2026 to 2028.

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