Is Tsm Stock Still A Buy

last updated on

Is Tsm Stock Still A Buy

Is Taiwan Semiconductor Stock Still A Buy?

Taiwan Semiconductor (TSM) is trading near all-time highs. This makes one wonder if TSM stock is still a buy, or if it is better to wait for a pullback.

As things stand right now, the chance of buying TSM stock is very strong. The Q1 earnings of Taiwan Semiconductor were terrific. The revenue jumped by 35% y/y and touched $35.9 billion. The gross margin of Taiwan Semiconductor is also sitting at 66.2%.

TSMC Is Forecasting 30% Revenue Growth

Taiwan Semiconductor is forecasting revenue growth of 30% for the full year. Also, the company's market cap is already above $2 trillion, and its P/E is still 27.

The P/S ratio of Taiwan Semiconductor stock is 17. All of this tells us that Taiwan Semiconductor stock is not overvalued at all.

Even if the Taiwan Semiconductor stock declines, it should be viewed as an opportunity to buy! Also, slow growth in some months should not be viewed as a red flag.

As things stand right now, Taiwan Semiconductor is a big player in the AI revolution. The company controls a 70% share of the global semiconductor foundry market. So as long as there's a need for semiconductors, TSMC isn't going anywhere.

If we talk about risks, the biggest one is geopolitical tension. The relationship between China and the USA can also have long lasting impact on TSMC.

Another big risk for Taiwan Semiconductor is that its customer base is highly concentrated. Apple and Nvidia account for 40% of the company's revenue.

The long-term outlook of the TSMC stock is very promising. So, if you are a long-term investor, then you should definitely buy the Taiwan Semiconductor stock!

Considering the forecasted earnings of TSMC for the future, the stock is reasonably priced. So, the fact that it is trading at yearly highs shouldn't be taken as an excuse to avoid buying it.

However, any dips in earnings could lead to short pullbacks in the TSMC stock price. But the Taiwan Semiconductor stock will likely make a comeback in no time. After all, the outlook for revenue growth remains very strong.

Trending Stories