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(Bloomberg) — Taiwan Semiconductor Manufacturing Co. has regained its spot among the world’s 10 most valuable companies as optimism about artificial intelligence continues and stock prices reach record levels.
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A 14% rise last week lifted the company’s market capitalization to record levels, but it fell 2% in early trading Monday, giving it a market cap of $634 billion. This is still higher than Broadcom’s figure and marks Taipei’s major listed club back into the top 10 clubs for the first time since 2020.
Analysts at Morgan Stanley and JPMorgan Chase & Co. expect the semiconductor giant to make further gains on the back of surging AI-related revenues and strong pricing power. Investor enthusiasm for generative AI has recently accelerated the rally in global semiconductor stocks, but on Friday, Nvidia capped its steepest decline in nine months amid profit-taking.
“Generative AI semis are a clear growth driver for TSMC,” Morgan Stanley analysts including Charlie Chan wrote in a March 7 note. The company’s overseas expansion also helps alleviate geopolitical concerns.
TSMC’s sales rose 9.4% from January to February as demand for high-end chips from a wave of artificial intelligence activity offset the potential impact of slowing iPhone sales. Some securities companies, including Morgan Stanley and JPMorgan, have recently raised their stock price targets by about 10%.
The options market showed that investors remain bullish on TSMC’s American Depositary Receipts. The put-call ratio fell to a one-month low, according to data compiled by Bloomberg based on open interest, and options traders remain bearish even as the company’s stock continues to hit new highs. This suggests that they are buying more bullish contracts than contracts.
–With assistance from Jenny Yu.
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