TSMC stock just hit a record — and the gains may be only starting

More gains may be in the cards for Taiwan Semiconductor ( TSM ) even as the stock has enjoyed a massive year of moving up and to the right on the charts.

"Another round of consensus earnings upgrades likely to come [on TSMC]," Citi analyst Atif Malik wrote in a note on Wednesday.

Malik lifted his earnings estimates for the company for the next two fiscal years. Two areas stood out in Malik's report:

He expects another strong year of results in 2027: "Supported by robust AI compute demand, potential upside from agentic AI, and the new networking cycle of CPO [co-packaged optics], we expect >40% year over year revenue growth for TSMC into 2027E," Malik said. "Along with full-year N2 contribution and more AI compute workloads moving to N3 from 2H26 and N2/A16 into 2028, we expect to see continuing consensus earnings upgrades as tight wafer foundry supply supports sustained demand growth. We believe TSMC's capex could increase over the coming years supported by strong revenue outlook."

The AI semiconductor market is likely to double next year: "We expect TSMC's AI revenue growth to nearly double next year considering most of its AI semiconductor customers are expecting accelerating growth," Malik explained. "TSMC's largest customer, Nvidia has guided to a doubling of its order intake and over 70% year over year revenue growth in FY2028E driven mainly by ongoing supply constraints. AMD has guided to over 80% CAGR in its Data Center AI business, while Broadcom expects its AI semiconductor revenue to almost double in FY2028E."

Taiwan Semiconductor shares hit a record high this week. They are up 61% year to date.

The company reports earnings on Oct. 15.

Brian Sozzi is Yahoo Finance's Executive Editor, host of the Sozzi Unleashed morning show, the ' Power Players With Brian Sozzi' podcast and a member of Yahoo Finance's editorial leadership team. Follow Sozzi on X @BrianSozzi , Instagram , and LinkedIn . Tips on stories? Email brian.sozzi@yahoofinance.com.