AMZN - Nvidia Supplier Taiwan Semi's Global Expansion and AI Revenue Growth in Focus Despite Overbought Signals | Benzinga
The remarkable rise of Taiwan Semiconductor Manufacturing Co (NYSE:TSM) has brought its risks into sharper focus despite the enthusiasm surrounding its role in the artificial intelligence (AI) boom.
TSMC’s shares have soared over 110% since October 2022, mirroring gains of key client Nvidia Corp (NASDAQ:NVDA), buoyed by global excitement over AI.
Yet, AI’s contribution to TSMC’s total revenue was only 6% in 2023r, sparking speculation about future demand and its impact on TSMC’s valuation, Bloomberg reports.
Signs such as the stock’s prolonged presence in overbought territory and its significant premium over average analyst price targets suggest the rally might be overstretched.
Even Morningstar Inc. analyst Phelix Lee, who holds one of the highest price targets for TSMC, expresses concern over the sustainability of AI ...