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Taiwan’s semiconductor manufacturing has another upside potential thanks to the boom in generative AI, according to Bank of America. Analyst Brad Lean raised his price target for the company’s US-listed shares to $115 from $105. The new target implies upside potential of 26.6% from Wednesday’s close. Taiwan Semiconductor Manufacturing Co. (TSMC) is a key beneficiary and is among our 20 global AI stocks thanks to the growing and expanding adoption of large language models (LLMs) and generative AI led by ChatGPT,” Lin wrote. “We believe that generative AI should act as one of the greatest drivers due to the significant computational requirements to run and train AI models.” The analyst said that Taiwan Semiconductor will exploit the “structural uptrend” in generative AI capabilities, which will drive demand for multiple semiconductors. “Data center related revenue (including supercomputers) is currently ~10% of revenue and we estimate that CPU/GPU/accelerator potential for generative AI could potentially provide 1-2% initially and likely up to 8% in the case of a bull. Taiwan Semiconductor shares are up 21.9% this year after falling 82% last year. TSM YTD Mountain TSM in 2023 – CNBC’s Michael Bloom
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