Morgan Stanley is urging investors to buy shares of Taiwan Semiconductor Manufacturing Co. (TSMC) ahead of its Q2 earnings release on July 17, citing surging AI demand and stronger-than-expected revenue growth as key catalysts.
In a note published Sunday, the bank flagged TSMC’s preliminary Q2 revenue of NT$933 billion, up 16% quarter-on-quarter in USD terms, exceeding both internal guidance and Wall Street estimates.
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Morgan Stanley sees a high likelihood that TSMC will raise its full-year revenue guidance, projecting 27% YoY revenue growth for 2025. Analysts also noted that order cuts in 3nm PC chips have been offset by crypto mining demand, with customers advancing orders ahead of a 2026 wafer price hike.
Utilization rates remain robust despite sluggish PC and smartphone sectors — reinforcing optimism around sustained semiconductor demand.
TSMC’s massive $165 billion U.S. fab investment may help secure tariff exemptions, positioning it well amid escalating trade tensions. The bank maintains a price target of NT$1,288, offering 17% upside from current levels.
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TSMC remains a top semiconductor pick for Morgan Stanley, with a rare mix of AI-driven revenue upside, valuation support, and geopolitical insulation. The upcoming earnings call will also serve as a bellwether for the broader chip sector, which has seen margin pressures and valuation corrections.
