There exist behemoth corporations on Wall Street that command attention with their glitz and glamour, overshadowing stalwarts with solid substance. Enter TSMC, the premier semiconductor manufacturer from Taiwan. This unassuming giant may not have the flashy allure of Tesla, the fervor of Apple, or the buzz of Nvidia, yet it stands as a linchpin in the tech industry, perhaps even more pivotal than Tesla or Apple. Contemplate a scenario where TSMC vanishes in thin air – it would likely grind the tech realm to a haunting halt or at least put it on ice for a considerable stretch.
The sage of Omaha himself, Warren Buffett, lauds TSMC as “One of the best-managed companies in the world… and nobody in the chip industry is in their league.” Who dares refute the “Oracle of Omaha”? Moreover, the company steadfastly continues its tradition of elevating revenue, margins, and all that jazz, year in, year out.
Our savant at Tipranks, Omer Farooq, penned an in-depth piece on this, brimming with insights you can peruse here. Right now, let us unravel three compelling reasons why TSMC merits undivided attention from discerning investors.
- Exponential Stock Ascendancy: In a thrilling spectacle, TSMC’s stock has ascended nearly 77% year-to-date, fueled by the snowballing demand for Nvidia’s offerings. Let us not overlook that AMD and Apple also entrust TSMC for their chip manufacturing, solidifying its indispensable role as the linchpin paving the way for some of the tech titans in the semiconductor arena. This segues to our next point.
- Supremacy in the Foundry Arena: Commanding a commanding 62% slice of the global foundry market over the last seven quarters, TSMC’s stranglehold is indisputable. To put it mildly, TSMC has entrenched itself as the epicenter of an industry projected to balloon to over $172 billion by 2032, as per Credence Research.
- Promising Growth Trajectory and Tempting Valuation
: Across the past decade, TSMC has magnified its revenue growth and technological prowess, a narrative poised to persist as burgeoning sectors like autonomous vehicles, Telehealth, and pharmaceutical research clamor for and hinge on TSMC’s chips. The company’s investments in cutting-edge process nodes such as 3nm and 2nm further assert its dominance as the undisputed titan in the semiconductor realm. Additionally, its forward P/E of 20, slightly above the semiconductor industry’s 19.1, signifies the stock’s affordability, given its potential trajectory.
Unveiling the Target Price for TSM Stock
Within the realm of Wall Street, TSMC is deemed a Strong Buy, featuring 5 Buys, 0 Holds, and 0 Sells. The average price target for TSM stock stands at $205, hinting at a 10.19% upswing. Furthermore, TSMC stock boasts a modest dividend yield hovering around 1%.
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The Verdict
Brass tacks time – TSMC presently emerges as one of the securest investments on Wall Street, given its apex status in the semiconductor realm and symbiotic liaisons with key tech powerhouses. It might not stir the same frenzy as its counterparts, yet while hype ebbs and flows, this Taiwan-born magnate has been honing its craft since 1987.