Dr. Stoxx
Stock Trader & Author, Oxford DPhil, Trading Education
Taiwan Semiconductor's excellent growth and low valuation relative to peers support its pullback case. It is the second-biggest chipmaker behind Nvidia, and its six-touch trendline looks firm, though the cup-and-handle pattern may be wrong. Both companies have excellent growth and peer-relative low valuations, but TSM has more than doubled Nvidia's year-to-date and 12-month returns. x.comÂ
TSMC's earnings set the stage for a strong reporting season. Hold the line on TSMC despite its shares being caught in SOXX's algorithmic sell-off; StockMKTNewz reported that TSMC beat quarterly revenue and EPS estimates. x.comÂ
TSMC's 54.6% growth this month is very bullish, and a bearish stance makes little sense. @moneyinmarket points to a month-on-month decline, which does not change that view. 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
Semiconductor leaders look better placed than high-beta stocks with poor company models. TSMC, ASML, Nvidia and memory should lead the sector and belong in the buy basket, with Broadcom not far behind. The CPU basket is only a hold: much of its upside was priced in during Intel and AMD's run. x.comÂ
TSMC's record quarter shows chip demand is accelerating, not peaking. Q3 revenue was about $46.7 billion (NT$1.49 trillion), up 51% year over year and above both the top of TSMC's guidance and Street estimates of NT$1.46 trillion. Quarterly revenue is up about 2.4x in three years. Despite bubble fears, the AI buildout still looks early and TSMC can go much higher than people realize. x.comÂ
TSMC looks like it has put in a blowoff top, rising even on an announcement that it cannot afford new ASML equipment. x.comÂ
Lam Research's record results suggest the equipment cycle is not ending despite its stock selloff. Revenue reached $8.22B, up 54% year over year and over 20% sequentially, while EPS rose 75%; ASML and TSMC also report customers needing more tools. Overweight with a $355 target and 35% upside, but the selloff is a gift only if Lam guides December higher. x.com x.comÂ
Taiwan Semiconductor looks undervalued as AI capex keeps climbing, yet investors are sleeping on it. x.comÂ
TSMC's shifting cost structure is pressuring gross margin despite revenue and EPS beats. TSMC reported Q3 gross margin of 66.4%, down from 67.7% in Q2, and another decline is guided next quarter; Arizona is expected to drag gross margin by 2-4%. TSMC is checking AI data-center progress as it plans wafer capacity, while reiterating long-term AI demand strength. Price hikes may be next, given management's commitment to protect shareholder interests. x.com x.comÂ
TSMC's AI-era growth opportunity makes it an incredibly bullish investment. CEO C.C. Wei said its annualized growth opportunity is probably higher than a high-50% CAGR. x.comÂ