Taiwan Semiconductor is significantly overbought, but analysts are still shouting: it can still rise.
Taiwan Semiconductor's stock price has surged, reaching the most severe overbought level in three years. Analysts point out that Taiwan Semiconductor's crucial role in the field of artificial intelligence indicates that it may be too early to give up on the upward trend. With a 14-day relative strength index exceeding 82, Taiwan Semiconductor has become one of the most severely overbought stocks in Asia. JPMorgan Chase has raised Taiwan Semiconductor's target price to NT$850, citing its role as a driver in data centers and artificial intelligence processing. Taiwan Semiconductor has risen by nearly 30% this year.
Zhitong App learned that the stock price of chip manufacturer Taiwan Semiconductor has soared to the most severe overbought level in three years, but its crucial role in the field of artificial intelligence (AI) indicates that it may be too early to give up on the upward trend.
Following the rise in customer NVIDIA's stock price, Taiwan Semiconductor's stock price further increased this week, rising by over 10% to reach a new high. This surge has pushed Taiwan Semiconductor's 14-day relative strength index above 82, making it one of the most severely overbought stocks in Asia according to this technical indicator.
Bloomberg Intelligence analyst Charles Shum stated, "Consumers and businesses are confident in the added value of Generative Artificial Intelligence (GenAI), so any potential price increase is reasonable." He added that the company's next valuation catalyst is the exponential growth of generative artificial intelligence used in devices such as smartphones and computers.
On Thursday, the world's largest chip foundry saw a 4.6% increase in the Taiwan stock market, reaching 769 New Taiwan dollars.
JPMorgan Chase raised Taiwan Semiconductor's target price by 10% to 850 New Taiwan dollars on Wednesday, stating that the stock is a "driving force for data centers and almost all artificial intelligence processing at the edge." JPMorgan analysts, including Gokul Hariharan, indicated that by 2027, revenue related to artificial intelligence will surge to 25%, with the company maintaining a leading position in developing advanced chips.
Due to NVIDIA's stellar performance driving the AI boom, Taiwan Semiconductor has risen by nearly 30% this year. Taiwan Semiconductor is set to announce its monthly sales figures on Friday.