Analysts are unconcerned by TSMC’s $100 billion wipeout

• The selloff is being driven by macroeconomic factors rather than fundamentals.
• Buy recommendations and high price targets indicate a possible comeback

The share price plunge that has wiped out about $100 billion from Taiwan Semiconductor Manufacturing Co.’s ‘TSMC’ market value this year matters little to the legions of analysts who see the company as a screaming buy.

According to sell-side analyst forecasts compiled by Bloomberg, TSMC shares are likely to rise almost 50% to a record high in the next 12 months as macro headwinds buffeting the sector lessen and investors refocus their emphasis to the company’s fundamentals.

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Fund managers are also beginning to see an end to the collapse in sight, and Chairman Mark Liu’s Wednesday projection for 30% revenue growth this year strengthens this case.

While TSMC’s decrease is significant, having lost more than a tenth of its share value, it is still less than half the drop observed in the worldwide semiconductor benchmark index in 2022. As the most advanced manufacturer of chips for companies ranging from Apple Inc. to Nvidia Corp., the business holds a commanding position in the global technological supply chain.

Because TSMC is the largest and most liquid company on Taiwan’s equities market, it has become an easy selling target for some overseas investors.

as stated by Huang The $475 billion corporation accounts for approximately 27% of Taiwan’s total equity market value.

“While many worry about a cyclical correction, we forecast share gain and robust pricing which will ensure TSMC grows uninterruptedly this year and also in 2023 and 2024,” Sanford C Bernstein analysts including Mark Li wrote in note earlier this month.

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Bloomberg aggregated 37 analyst recommendations, 34 of which are buys, three are holds, and none are sells. The average 12-month price estimate is NT$816.75, compared to the closing price of NT$541 on Thursday.