JPMorgan: TSMC: Rising confidence in AI demand, matched by increasing capex plans; Raise PT to NT$3200
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Key Views
Management's visibility on AI demand now extends to 2029–2030, supported by hyperscaler deployment roadmaps. JPMorgan expects TSMC may raise its data center AI CAGR forecast (currently 69% for 2024–2029). Capex projections for 2026/2027/2028 are revised upward to $62B/$81B/$90B, driven by N2, N3, and advanced packaging build-outs. Leading-edge node capacity (N5 and below) is projected to grow at a 24% CAGR through 2026–2028.
Q2 2026 actuals came in slightly ahead of estimates, with revenue at NT$1.27T, gross margin at 67.7%, and EPS at NT$27.25.
Outlook
Near-term focus centers on the duration of the AI investment cycle. The upcoming Q2 2026 hyperscaler earnings season will serve as a key catalyst. EPS forecasts for 2026/2027/2028 stand at NT$108.15/NT$141.37/NT$180.01.
Recommended Securities
TSMC (2330.TW) — Overweight; Target Price: NT$3,200 (June 2027).
Key exhibits
Exhibit 1
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Exhibit 3
