Intel's New Buyers Mean Good News for Taiwan Semiconductor Stock

Key Points

• Taiwan Semiconductor may benefit substantially from the new stakes being bought in Intel stock, as wafer equipment demand is set to go higher.
• Wall Street analysts are raising their targets for the company ahead of any financial impact.
• United States Congress members have also bought the stock, knowing how well-positioned it is in this race.

News is starting to show up again for the United States technology sector, this time in a more unconventional manner than over the past couple of years. The United States government and other entities are starting to buy up significant stakes in one company, which is best positioned to carry on the onshoring agenda for chipmaking and semiconductor capacity for the nation.

The new buys for Intel Corp. NASDAQ: INTC mean that the company's potential upside and future expansion are very much alive. However, investors can look past that event and see which other lateral plays will stand to benefit from such expansion, such as the names behind the raw materials and equipment that a company like Intel needs in the first place to make its chips.

That is where shares of Taiwan Semiconductor Manufacturing NYSE: TSM come into play. As the largest player (in terms of market share and volume) in the wafer raw material manufacturing and equipment provider for all of the biggest names in the United States and Asia, this company is likely to reach new highs on these latest developments for good reason.

A New Manufacturing Setup

Intel wasn’t known for relying on Taiwan Semiconductor in the past, unlike most of its peers and competitors; however, as the company changed to ramp up its production of the ten-nanometer and seven-nanometer chips (the Intel 7 and Intel 4), it began outsourcing some production to Taiwan Semiconductor.

This shift allowed Intel to stay competitive in this landscape. Even though the company is now building its own foundry services, it is a long way from becoming an independent manufacturing entity. This new backing from buyers is likely a sign that future demand and production ramp-up are right around the corner.

While everyone will be focused on the Intel price action, investors looking two steps ahead will focus on Taiwan Semiconductor as a way to tap into this growth through a much more advanced and diversified company, one that has a handful of large customers that keep new orders coming in like clockwork.

Thanks to this positioning and stable cash flow, Taiwan Semiconductor has grown into a company with a market capitalization of over $1 trillion. These factors also suggest that its valuation will continue to grow in the future.

The Market’s Take on Taiwan Semiconductor’s Future

Over the past quarter, Taiwan Semiconductor stock has delivered attractive momentum, showing investors a return of just over 20% during that period to beat the S&P 500 index altogether. Institutions typically follow this momentum since it could mean that the stock could very well break above into a new 52-week high.

This is why investors can note that up to $8.6 billion worth of buying took place during the quarter, a direct vote of confidence coming from the “smart money” corners of the market, signaling high conviction in the coming months for this company.

More than just technical momentum, the fundamentals are still as strong as ever for Taiwan Semiconductor, especially because it reported $2.47 in earnings per share (EPS) during its latest quarterly earnings release, significantly beating the market’s expectations for $2.13 in EPS only.

Most investors know that EPS growth drives most of a stock’s price action. The ability to keep beating these forecasts may only be amplified as more players in the chipmaking industry make their way to the United States, where Taiwan Semiconductor is making significant investments to onshore its own manufacturing process.

Noticing all of these factors lined up in favor of Taiwan Semiconductor, Wall Street analysts had to step in and react accordingly, which is why investors will see a few outlier ratings over the past month. While the consensus is still a bullish Buy rating valuing Taiwan Semiconductor stock at $258.3 per share (for 11% additional upside), others saw further into the future.

Such as Needham & Co. analyst Charles Shi, who, as of late July 2025, reiterated a Buy rating for the stock, though his valuation reached a bit higher at $270 per share. From there, the stock trades today, this call would imply a new 52-week high (likely triggering new institutional buying) and a net upside potential of 16.5% as a reward.

Moreover, U.S. Congress members bought the stock as these new ratings came in. Who is better positioned to know what new bills and regulations will do to the chipmaking industry than Congress members?

Congressman Cleo Fields bought up to $500,000 worth of Taiwan Semiconductor stock across two transactions made in June and July of 2025, giving investors another pillar of strength to lean on when developing their own potential buying thesis in Taiwan Semiconductor stock.