Taiwan Semiconductor Manufacturing Company Ltd. (TSMC) saw its stock price rise modestly by 0.56% to close at $209.32 on January 31, 2025, after opening at $209.93. The stock reached an intraday high of $215.00 before settling down, with trading volume at 13,910,400 shares, slightly below the average. The upward movement was primarily driven by optimistic growth projections, with TSMC expected to achieve a 20% CAGR in revenue over the next five years, largely due to the increasing demand for AI-related chips. This segment is projected to grow at a 45% CAGR, bolstered by strategic partnerships with tech giants like Nvidia, AMD, and Apple.
Despite the positive outlook, TSMC faced some headwinds earlier in the week due to the launch of DeepSeek's R1 AI model, which caused a sell-off in the semiconductor sector. However, TSMC's strong market position and undervaluation at 19x forward earnings, coupled with its robust growth prospects, helped the stock recover. Analysts remain optimistic about TSMC's long-term potential, with several maintaining a "buy" rating and projecting significant EPS growth.