This is Why I Think Taiwan Semiconductor Manufacturing Company is the Most Promising Future Stock!

TSM is soaring more than 10%! to reach an all-time high!

As the world’s largest contract chipmaker, TSMC is renowned for its advanced manufacturing capabilities, which are in high demand, especially in the midst of the artificial intelligence (AI) boom. The company is actively advancing its development of 2nm technology.

TSMC has significantly benefited from the expansion of AI infrastructure, as its clients race to produce more sophisticated AI chips to meet rising demand. The ongoing increase in capital expenditures by major tech companies, particularly in AI, suggests a long runway of growth for TSMC. As AI models evolve, they require more GPUs (graphics processing units) and CPUs (central processing units), further boosting the demand for TSMC’s products.

Apple, TSMC’s largest customer, recently launched an AI-powered iPhone, which contributed to the company’s impressive revenue. In its most recent quarter ending in September, TSMC reported revenue of $23.62 billion, marking a 36.5% increase year over year, indicating continued strong demand for its products.

Looking ahead, TSMC is expected to see robust and consistent revenue growth over the next five years. By 2028, the company anticipates that AI-related chips will make up a low double-digit percentage of its total revenue, growing at a compound annual growth rate (CAGR) of 50%.

This growth will be largely driven by its cutting-edge 2nm chip design.

Analysts remain optimistic about TSMC’s future, with the stock maintaining a strong "buy" rating and an average price target of $205.00, representing an 11.29% increase from its recent price of $184.20.And now the target price was surpassed!

At the end of Q2 2024, 156 hedge funds held positions in TSMC, with total investments totaling $21.28 billion. Fisher Asset Management was the largest shareholder, holding a stake valued at $4.94 billion as of June 30.

In its Q2 2024 investor letter, Diamond Hill Capital highlighted TSMC as a top contributor to its returns, along with Alphabet and Microsoft. They noted that TSMC's fundamentals remain strong, with demand for its chips growing, particularly as trends in machine learning and cloud computing continue to accelerate.