Morgan Stanley Upgrades Taiwan Semiconductor Amid Strong AI Demand

Taiwan Semiconductor Manufacturing Co. (TSMC) shares surged over 4% after Morgan Stanley upgraded the stock to a top pick, citing strong AI-driven capital spending from major tech firms like Meta and Microsoft. The upgrade reflects renewed confidence in the sustainability of AI demand and alleviates previous concerns about order cuts for TSMC’s advanced CoWoS packaging technology and the potential for a joint venture with Intel, which TSMC management has ruled out. Morgan Stanley maintained its Overweight rating despite a slight reduction in price target, emphasizing that TSMC remains attractively valued compared to peers. Analysts expect a swift rebound in TSMC's stock performance as uncertainties dissipate, supported by the company’s robust financial metrics and its crucial role in the global semiconductor supply chain.