AI gains: Taiwan Semiconductors, Airship AI trade higher
AI players Taiwan Semiconductors (TSM) and Airship AI Holdings (AISP) are trading higher on Wednesday. Taiwan Semiconductors received a price target boost from an analyst at J.P. Morgan due to AI revenue expectations, while Airship AI announced a new contract with the US Department of Justice.
Yahoo Finance Anchors Rachelle Akuffo and Akiko Fujita break down the latest developments for these companies.
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Editor's note: This article was written by Nicholas Jacobino
Video Transcript
AKIKO FUJITA: We have a couple of AI-focused stocks. Taiwan Semi and Airship AI both surging this morning. Taiwan Semi got a price target boost from an analyst at JP Morgan citing its AI revenue expectations and calling it the key AI semi enabler. The sensor and data management company Airship AI announcing a new contract with the Department of Justice.
Let's start with this JPM note, Rachelle, because we should mention, I mean, TSMC already has a 90% market share on all AI-related silicon. So this isn't about them expanding their market share, but essentially getting more revenue coming through from that AI play they already have in place. Specifically, JP Morgan analysts saying that they expect that revenue to grow to 25% of the total company revenue by 2027, which when you think about how much of the potential we've been talking about, yes, it's a big jump. But 25% in the grand scheme of things, maybe not as significant.
RACHELLE AKUFFO: It's true. I mean, but it does seem as if this note just sort of reiterates judging by the title of it here. The JP Morgan team led by analyst Gokul Hariharan, "Where All Roads in AI Lead," that was the title of their note here. That's something that we've continued to talk about when we think about the plans that a lot of these companies are making with generative AI. All roads do come through TSMC.
They have an overweight rating. I did think it was interesting that they highlighted it as TSM emerging as the enabler for almost all AI processing at the data center and edge with meaningful growth from AI, as you mentioned there, in the next three to four years. And as you mentioned there, that exposure that they're looking at, they're expecting that to rise to 25% by 2027. They do like it still has an attractive valuation, especially when you compare it to an NVIDIA. So I can see-- I can see the optimism there and clearly the stock being rewarded.
The other ticker that we were looking at, Airship AI, still rallying on that contract that it got with the Department of Justice. Now, for people who aren't familiar with this name, although it is one of our top-trending tickers this morning, it's known for its AI-driven video and sensors, a lot of that tied to surveillance. And this actually builds on the relationship that they built with the DOJ in 2023. So really expanding on that and clearly rallying. Keep in mind though, this is a cheaper stock to keep in mind, but one that we're definitely continuing to watch.
