Daniel Romero
Technology Equity Analyst, Semiconductors/Data Centers/Physical AI
Intel's high valuation is hard to justify while its foundry turnaround remains unproven. At about 59x forward earnings, nearly three times TSMC's 19x, Intel has slower projected revenue growth; its foundry lost $2.09 billion in Q2 2026, while TSMC's Q3 operating margin was 58.7%. A politician's stock purchase alone does not make Intel a buy. x.com x.comÂ
TSMC may lose pricing power as performance gains shift from shrinking transistors to stacking, interconnects and optics, while logic folding could make older processes competitive. Despite strong leading-edge demand, investors may overestimate the profit share its node leadership can retain. Its cautious expansion and past reluctance toward advanced packaging suggest a risk-averse culture that protects returns but could leave it late to disruptive technologies and key customers. x.comÂ
Tower Semiconductor's 2028 guidance makes its shares attractively valued around $180 despite competition from Silith, GlobalFoundries, STMicroelectronics and others. The stock previously felt too rich to add to. x.com x.comÂ
TSMC's capacity-constrained growth is holding margins through its costly 2nm ramp. Its Q4 revenue guide of $52.3-54.3B beats $49B consensus, implying 14% sequential growth, with 65-67% gross-margin guidance; planned Q4 capex is $19-23B versus $13.8B last quarter. World Trade Securities maintains Overweight and a $620 target. TSMC is also in talks to run Elon Musk's proposed Texas Terafab; additional fab and equipment demand depends on a deal. x.com x.comÂ
TSMC trades at its historical average valuation in the midst of its industry's largest investment cycle. The world's most important company is at 17.5x forward earnings, in line with its 10-year average. x.comÂ
Tower Semiconductor's stronger-than-expected capacity expansion lets it fill more optical-chip orders itself, reducing customers' incentive to move to foundries they regard as technologically weaker. Its hybrid bonding packs dense connections between photonic chips and their driver electronics, an advantage viewed as effectively unmatched among Western suppliers. Tower remains one of the highest-conviction holdings despite the portfolio trim. x.comÂ
TSMC's strong AI demand is straining supply, while solid company fundamentals and attractive semiconductor valuations make an abrupt stop to its advance unlikely. TSMC's Wendell Huang expects 2026-28 capex to be significantly higher than in the previous three years to support customer growth; he says most capex is tied to long-term demand. x.comÂ
A supply response could compress Western Digital's pricing and margins, eroding its apparent cheapness. Its 2013-24 normalized earnings merit a look: even huge demand growth in other industries eventually drew supply and mediocre returns. A digestion/reset would hurt buy-and-hold investors, though the outcome is uncertain. Pre-AI economics were mediocre and unlikely to become amazing post-AI; TSMC's stronger pre-AI economics make its post-AI case better. x.com x.com x.comÂ
Tower Semiconductor is building the foundry that silicon photonics needs, alongside its power management business, and its chart is flashing a blue buy signal again. x.comÂ
TSMC's growth looks compelling against its valuation. Diluted GAAP EPS rose about 70% year over year and US-dollar revenue 41%; at roughly 22 times annualized earnings, guidance implies accelerating growth. TSMC expects continued demand for leading-edge processes, including its 2-nanometer ramp. x.comÂ