Taiwan Semiconductor, Micron move higher on upgrades
Shares of Taiwan Semiconductor (TSM) and Micron Technology (MU) are trading higher as financial firms upgraded the stocks on continued interest in AI.
Bank of America has lifted the price target of Taiwan Semiconductor from $760 to $880 per share and maintained a Buy rating, citing increased demand for advanced materials produced by the company. Morgan Stanley has lifted the price target of Micron to $78 per share, pointing to demand in the high bandwidth memory space that is priced into shares.
Yahoo Finance Anchors Brad Smith and Seana Smith break down the latest developments for these companies.
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Editor's note: This article was written by Nicholas Jacobino
Video Transcript
BRAD SMITH: Two price hikes to start the week, all stemming from the AI hype. Bank of America raising its price target on shares of Taiwan Semiconductor, calling the company a key enabler of AI with a long-standing leadership. Now, similar vibes over at Morgan Stanley, the bank raising its price target on Micron, citing the market's clear desire to pay higher multiples for AI stories.
Let's take a look at both of the stock prices for these companies as well as we kind of dive into what was behind the call there. And I'll begin here with Taiwan Semi, if I will, because Bank of America boosting that price target, the new price target, $155 here US. They expect the structural advanced node demand here-- and don't ask me what that means.
I'm going to have to look into it just a little bit further here because I went to school for marketing and business law. But anyway, the structural advanced node demand to be stronger, supported by AI's strength, computing power, and saving requirement as well. That's from the analyst Brad Lin in this Monday note.
SEANA SMITH: Yeah, certainly. They're also very bullish just on the partnership with Intel and what exactly that could look like here going forward. They talk about the fact that they see the upside here. The forecast is to increase their sales here from 3% to 6% in 2025, given the fact that at least this analyst from Bank of America does see upside from Intel outsourcing to Taiwan Semiconductor.
So that, of course, being built into the expectation here from Bank of America, reflecting about a 14% upside move that they see for Taiwan Semiconductor from the stock's closing price on Friday. Then also flipping back over to Micron and what we're seeing there. The Morgan Stanley analyst-- so this is an interesting call because at first, you might think that the company is actually a bit more bullish because they are raising their price target.
So yes, I guess, in theory, but you also got to keep in mind where the stock is trading today. So it's right above 95 bucks a share. The company's new price target is $78. They raised that up from $74 to $75, so still below where the stock is trading today, below where it closed, obviously, on Friday.
And the case that they are making here is that they are constructive on the opportunity that they do see for Micron ahead in this high-bandwidth memory space, but in their view, it's more than priced into shares at the current level. So this is the stock year to date, up just about 11% but has been on a run. So they think at least it's fairly valued at this point, and that's why they're not raising their price target too much higher.
BRAD SMITH: Just for closure out there, for those that were wondering what structural node demand is here, I mean, I guess you just have to boil it down to node, and then you can add on the demand. But the node is essentially, as I understand it, just the network and the amount of protocol connections that are necessary for a network. That's the fast description here as we get to move on here. That's what they're telling me in my ear.
SEANA SMITH: What did you do, a quick google?
BRAD SMITH: Well, yeah. I mean, we got these laptops in front of us. We got to do some work here.
