June 9 - Taiwan Semiconductor Manufacturing Co. (NYSE:TSM) posted a sharp rise in May sales as demand for advanced chips used in artificial intelligence applications stayed strong, even as month-to-month figures dipped.

The world's largest contract chipmaker brought in NT$320.5 billion ($10.7 billion) last month, up about 40% from a year earlier. The figure marked a slowdown from April's 48% annual jump and was down 8% sequentially.

The May total pushed revenue for the first five months of 2025 to NT$1.51 trillion, a 43% increase from the same period last year.

TSMC, which supplies key components to Nvidia (NASDAQ:NVDA) and Apple (NASDAQ:AAPL), is benefiting from persistent AI-related orders. Clients are reportedly building inventory in anticipation of potential disruptions tied to global trade uncertainty.

Analysts now expect TSMC's second-quarter revenue to rise more than 50% from the year-ago period, pointing to a strong pipeline despite short-term volatility.

CEO and Chairman C.C. Wei reiterated last week that demand for the company's AI chips remains ahead of supply, and he expects revenue from AI accelerators to double in 2025.

Is TSMC Stock a Buy?

Based on the one year price targets offered by 17 analysts, the average target price for Taiwan Semiconductor Manufacturing Co Ltd is $218.45 with a high estimate of $265.34 and a low estimate of $119.37. The average target implies a upside of +5.53% from the current price of $207.00.

Based on GuruFocus estimates, the estimated GF Value for Taiwan Semiconductor Manufacturing Co Ltd in one year is $215.93, suggesting a upside of +4.31% from the current price of $207.00.

This article first appeared on GuruFocus.