Microsoft and TSMC gain buy ratings due to strong AI-driven growth, while AMD’s valuation tempers enthusiasm despite its rally.
Analysts upgraded Microsoft (MSFT) and Taiwan Semiconductor Manufacturing (TSM) to buy ratings, citing robust AI-driven performance. Microsoft trades at a P/E of 28, supported by Azure’s 43% growth and $90.01 billion in Q4 revenue, while TSMC reported a 77% surge in net income last quarter.
Microsoft’s Azure crossed $100 billion in annual revenue, with commercial remaining performance obligations (RPO) hitting $678 billion, up 84%. TSMC’s leading-edge foundry position strengthens its role in the AI supply chain. AMD, trading at a trailing P/E of 124 after a 119% year-to-date rally, was rated a hold due to valuation concerns.
The three companies represent distinct layers of the AI stack: hyperscale cloud, semiconductor manufacturing, and merchant accelerators. Analyst targets for Microsoft average $563.84, reflecting confidence in its growth trajectory.