Taiwan Semiconductor’s Gulf Play Could Make Bears Obsolete

A new trend appears to be emerging in the United States technology sector, particularly in light of President Trump’s newly implemented trade tariffs across various countries and industries. This one, however, managed to find a way around the new world, looking to team up with a region that holds high-growth potential in the coming months and quarters.

This region is the United Arab Emirates (UAE), where President Trump and some industry figures visited in May 2025. They are looking to land new goodwill and potential partnerships between the nation and the United States, securing new investment and growth catalysts alike.

Within this new wave of investment and development, there is a new player joining the party, one that investors won’t want to miss.

Shares of Taiwan Semiconductor Manufacturing (NYSE:) are likely to see a new growth catalyst emerge, as the company has decided to expand its presence and operations into the UAE in order to avoid being left behind by its peers in the semiconductor and chipmaking space today.

Before the news spreads further, here is what a potential expansion might mean in terms of upside and financial growth.

Taiwan Semiconductor Won’t Be Alone

Recently, chipmaking darling NVIDIA (NASDAQ:) Co. also announced its own plans to expand its presence and logistics exposure into the UAE, and this is where investors begin to realize one of the often-forgotten dynamics that comes with any success NVIDIA may have.

Taiwan Semiconductor stock is closely tied to NVIDIA since it provides the “raw materials” needed for NVIDIA to produce its industry-leading chips. Therefore, plans to boost production volume within the UAE will likely only come to fruition once Taiwan Semiconductor also joins the scene.

This is why the company decided to build a “Gigafab,” a massive, advanced production facility that will not only drive the company’s exposure away from Chinese and other Asian tariffs but also mitigate the geopolitical elephant in the room: a potential Chinese invasion of Taiwan.

With this shift in play, those who were bearish on this stock might have little to nothing left to stand for, and that is a fact that investors can begin to notice in the underlying stock indicators today.

Upside Pressures Become Too Obvious

Over the past month, Taiwan Semiconductor’s short interest declined by as much as 5.8%, indicating potential bearish capitulation as these sellers face the upside potential the company will likely exhibit moving forward. This is where checking other outside indicators will come into play for investors.

This new setup might have influenced other forces in the market as well other than the short sellers, as up to $8.3 billion worth of institutional capital has come to call Taiwan Semiconductor stock its home over the past quarter, which comes on top of the additional $9.8 billion purchased over the past quarter as well.

Investors can assume that the recent UAE developments, which are part of the company, have triggered additional institutional interest in the company’s future, understanding that this not only solidifies its positioning in the industry but also creates new opportunities for future financial growth.

As a matter of fact, Wall Street analysts now expect Taiwan Semiconductor to report up to $2.65 in earnings per share (EPS) for the fourth quarter of 2025, a significant jump of 25% from the latest reported $2.12 EPS for the past quarter.

With this in mind, those investors who understand that a large portion of a stock’s price action comes from current and perceived EPS growth now have another justification to consider Taiwan Semiconductor stock for their list of stocks with upside potential in the relatively short-term future.

Moreover, these investors can observe that the stock has traded at a 9.1x price-to-book (P/B) multiple today, commanding a premium over the average valuation of the rest of the computer sector, which stands at 6.9x. This is typically a good indicator of confidence, as markets will willingly pay premiums for names they believe can outperform their peers and the broader S&P 500 index.

Following these new developments, Barclays analyst Simon Coles decided to weigh in on the future potential of Taiwan Semiconductor on the UAE news. This analyst began the month of June 2025 with an Overweight rating, along with a valuation of up to $240 per share, which calls for as much as 22% upside from the company’s current trading price.

The markets (and Wall Street) have become aware of what is in store for the future of this stock, calling for further action from investors before it is too late to recognize what could be gained in this name moving forward.

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