‘A No Brainer’: Why Taiwan Semiconductor Stock Is the Smartest Bet in Tech Right Now
Wall Street’s heavyweights are doubling down—TSMC’s stock isn’t just climbing, it’s rewriting the rules of semiconductor dominance.
Here’s why the smart money won’t touch anything else.
The Chip Empire Strikes Back
While legacy tech firms scramble for AI relevance, Taiwan Semiconductor quietly owns the silicon that powers it. No factories, no fuss—just 54% market share and a client list that reads like a Nasdaq top 100.
Margin Machine
59% gross margins last quarter. That’s not manufacturing—that’s printing money while competitors beg for subsidies. Apple’s A18 Pro? Nvidia’s Blackwell? All forged in TSMC’s fabs.
The Geopolitical Hedge Nobody Mentions
Yes, China tensions linger. But with Arizona fabs coming online and Europe paying premium prices for ‘de-risked’ supply chains? TSMC turned geopolitical angst into a pricing strategy—brilliant or borderline exploitative.
*Closer*: When a stock’s this obvious, even hedge fund managers pause their yacht shopping to buy in. Don’t overthink it—just don’t be last.
Confident Investing Starts Here:
- Easily unpack a company's performance with TipRanks' new KPI Data for smart investment decisions
- Receive undervalued, market resilient stocks right to your inbox with TipRanks' Smart Value Newsletter
The proof, as the saying goes, is in the pudding, and TSM’s sales figures for May surged by some 40% year-over-year – a crystal clear indication that spending is strong.
But does that mean that TSM is a good investment right now, or have investors missed the boat? One top investor known by the pseudonym KM Capital sees plenty of dollar signs up ahead.
“Major cloud and AI infrastructure investments by Amazon, Google, and Meta reinforce TSM’s dominant position and long-term growth prospects,” shares the 5-star investor, who is among the top 3% of TipRanks’ stock pros.
The investor further details that Amazon has been “aggressive” with its spending announcements regarding new data centers in both the U.S. and Australia, Google just bought 85 acres in Ohio (which could house a major AI infrastructure project), while Meta is pursuing a 150MW geothermal project in New Mexico – a sign of large data center projects on the horizon.
Moreover, there is plenty of real-world AI potential that should continue driving sales, such as the advent of robotaxi and humanoid androids. The investor points to one report which predicts that humanoid robots could become a $5 trillion industry by 2050.
Much of this future business will be funnelled toward TSM since Intel is far away from challenging TSM, giving the company quite a substantial moat over the competition, reminds the investor.
KM’s discounted cash FLOW model suggests that TSM’s fair value is $292, suggesting a healthy upside and “making TSM a no-brainer investment opportunity.”
While risks remain, such as geopolitical tensions, trade dustups, and a reliance on a relatively concentrated crew of hyperscalers, KM urges investors to look beyond these potential pitfalls.
“I think that TSM’s rock-solid fundamentals coupled with compelling valuation far outweigh all the risks and uncertainties,” concludes KM Capital, who gives TSM a Strong Buy rating. (To watch KM Capital’s track record, click here)
That’s the overwhelming spirit on Wall Street as well. With 7 Buys and 1 Hold rating, TSM enjoys a Strong Buy consensus rating. That being said, its 12-month average price target of $223.71 has only minimal upside in the coming year. (See)
To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a tool that unites all of TipRanks’ equity insights.
