Despite a recent 3.5% decline amid a general downturn in chip stocks, TSMC's shares have still increased about 5% since the start of 2025.

The company's stock has seen a significant rise of 81% over the past year, outperforming the broader market, which gained 28.5% during the same period.

While the outlook for chips used in computers and personal devices remains less optimistic due to weakened consumer electronics demand over the past two years, improvements are expected in 2025, largely driven by AI application needs.

Investors are targeting a bullish price of $246 for TSMC's stock, calculated by adding $40 to the breakout point of $206, following a recent retest of an ascending triangle pattern.

Taiwan Semiconductor Manufacturing Co (TSMC) is set to announce a remarkable 58% increase in its fourth-quarter profit on January 15, 2025, driven by surging demand for advanced chips, particularly in AI applications.

TSMC is heavily investing in overseas manufacturing, committing $65 billion to build three plants in Arizona, which represents the largest foreign direct investment project in the U.S. currently.

The success of TSMC's Arizona factory will be crucial for its future performance, particularly concerning yield rates and overall demand.

Analysts from Citi noted that the depreciation of the Taiwan dollar has positively impacted revenue, and they anticipate continued momentum in the AI supply chain.

The relative strength index (RSI) for TSMC remains above 50, indicating ongoing bullish momentum despite recent fluctuations.

Key support levels for TSMC's stock include $190, which may attract buying interest, and $175, which could draw in long-term investors if the stock experiences further declines.

The company's advancements in 5nm process technology have positively influenced its wafer revenues, showcasing strong market adoption.

In its October earnings call, TSMC projected its 2024 capital expenditure to be slightly above $30 billion, reflecting its commitment to growth.