Taiwan Semiconductor Manufacturing Company Limited (TSM): Bull Case Theory
We met A strong paper Limited (TSM), Taiwanese semiconductor manufacturer of Substack, by Oguz Erkan. This article summarizes Bulls’ paper on TSM. Taiwan Semiconductor Manufacturing Company Limited (TSM) share was trading at $155.84 as of April 14thth. According to Yahoo Finance, TSM’s successor P/E was 22.60 and 17.48, respectively.
The robot arms holding the semiconductor chips emphasize the accuracy and quality of the company’s production equipment.
TSMC, the world’s largest chipmaker, shows impressive growth with a five-year revenue CAGR of 16%, net profit margin of 40% and stock return ratio of 30%. Despite these solid financials, stocks have fallen primarily due to investors’ concerns over the impact of tariffs on semiconductor demand. It is true that when hyperscalers who invest heavily in AI infrastructure begin to collect returns, they end up slowing down their spending on semiconductors, but this is not the overall story. Just as how the need for more servers has grown since 1994, the need for chips will persist as AI infrastructure continues to grow. TSMC’s market advantage is clear as it increased its market share from 63% in the last quarter to 67%, and maintained its market share of over 90% in advanced chip manufacturing. Its 3NM and 2NM processes are 20% and 40% more than their closest competitor, Samsung, respectively. Despite wider economic uncertainty, semiconductor demand continues to rise as it is only in the early stages as the AI sector is expanding. TSMC is the go-to manufacturer of cutting-edge chips, regardless of who designs them. Currently trading at 14 forward P/E, the stock offers a compelling long-term opportunity, especially for investors looking beyond a temporary slowdown in spending. Given the TSMC’s major market location, technical advantages, and unrelenting demand for chips, its current valuation is attractive even in uncertain economic conditions. While the market may be overly cautious about future growth, this represents an opportunity for investors who are confident in the ongoing expansion of AI and semiconductor needs.
Taiwan Semiconductor Manufacturing Company Limited (TSM) is 30 Most Popular Stocks of Hedge Funds. According to the database, the 186 hedge fund portfolio held TSM at 158 last quarter at the end of the fourth quarter. Although we acknowledge the risks and possibilities of TSM investments, our belief lies in the belief that some AI stocks offer higher returns and hold a greater commitment to doing so within a shorter time frame. If you’re looking for AI stocks that are more promising than TSM, but are trading at less than five times the revenues, Cheapest AI stocks.