A Critical Role in the AI Buildout Makes Taiwan Semi Stock a Must-Watch at All-Time Highs

• Taiwan Semiconductor (TSM) exhibits exceptional growth, profitability, and strong technical momentum, trading near all-time highs.
• TSM is rated a “Buy” by most analysts, with price targets ranging from $330 to $665.
• Revenue and earnings growth are robust, with expectations of 43% and 59% increases this year, respectively.
• Valuation concerns persist, but positive analyst revisions and strong demand support the bullish outlook.

Today’s Featured Stock

Valued at $2.51 trillion, Taiwan Semiconductor (TSM) is the world’s largest dedicated integrated circuit foundry. As a foundry, the company manufactures ICs for its customers based on their proprietary designs using its advanced production processes. 

What I’m Watching

I found today’s Chart of the Day by using Barchart’s powerful screening functions to sort for stocks with the highest technical buy signals and superior current momentum. I then used Barchart’s Flipcharts feature to review the charts for consistent price appreciation. TSM checks those boxes. The Trend Seeker issued a new “Buy” signal on Sept. 8. The stock has gained 7.56% since that signal.

Barchart’s Technical Indicators for Taiwan Semiconductor

Editor’s Note: The technical indicators below are updated live during the session every 20 minutes and can therefore change each day as the market fluctuates. The indicator numbers shown below therefore may not match what you see live on the Barchart.com website when you read this report. These technical indicators form the Barchart Opinion on a particular stock.

Taiwan Semiconductor hit an all-time high of $487.47 on Oct. 5.

• Taiwan Semiconductor has a Weighted Alpha of 67.69.
• TSM has a 100% “Buy” opinion from Barchart.
• The stock has gained 60.6% over the past 52 weeks.
• Taiwan Semiconductor has its Trend Seeker “Buy” signal intact.
• The stock recently traded at $472.20 with a 50-day moving average of $429.81.
• TSM had 9 highs and gained 10.09% in the last month.
• 60-month beta of 1.37.
• Relative Strength Index (RSI) is at 64.67.
• There’s a technical support level around $470.40.

Don’t Forget the Fundamentals

• $2.51 trillion market capitalization.
• 35.05x trailing price-earnings ratio.
• Dividend yield of 0.92%.
• Revenue is expected to grow 43.12% this year and another 35.04% next year.
• Earnings are estimated to increase by 59.22% this year and an additional 30.04% next year.

Analyst and Investor Sentiment on Taiwan Semiconductor

• Wall Street analysts followed by Barchart give the stock 15 “Strong Buy,” 2 “Moderate Buy,” and 1 “Hold” opinion with price targets from $330 to $665.
• Value Line rates the stock “Above Average” with price targets from $420 to $635.
• Morningstar thinks the stock is 9% undervalued with a price target of $534.
• CFRA’s MarketScope rates the stock as “Buy” with a price target of $574.
• 248,400 investors are following the stock on Seeking Alpha, which rates it as a “Hold” and notes a high valuation.
• TipRanks’ analysts have a consensus of $543.43, which is 15% above yesterday’s close.
• Short interest is 0.58% of the float with 3.13 days to cover the float.

The Bottom Line on Taiwan Semiconductor

Who isn't buying this company’s products? The company stands out with exceptional growth and profitability, and momentum is very strong. Recent analyst revisions remain upbeat, but valuation concerns balance out the underlying strengths. 

Additional disclosure: The Barchart Chart of the Day highlights stocks that are experiencing exceptional current price appreciation. They are not intended to be buy recommendations as these stocks are extremely volatile and speculative. Should you decide to add one of these stocks to your investment portfolio, it is highly suggested you follow a predetermined diversification and moving stop loss discipline that is consistent with your personal investment risk tolerance.

On the date of publication, Jim Van Meerten did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.