Jimmy Investor
Former Equity Analyst
TSMC's discounted cash flow scenario puts fair value at $389, with the stock shown as 12% below that level. The scenario assumes 30% free-cash-flow growth over the next five years, a 25x terminal multiple and a 15% required return; the valuation is labeled reasonable, with a warning to take the estimate with a grain of salt. 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
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
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
TSMC has only upside from here because even the lowest post-earnings 12-month analyst target is $440, above its $422 share price. The average target is $586.92 and the highest is $1,000. x.comÂ
TSMC's growth is constrained by capacity, so its growth rate is already known and priced in. x.comÂ
TSMC belongs in every portfolio because its growth, moat, market dominance and pricing power are unmatched, and ignoring it over China risk is a mistake. It holds about 90% of the advanced-node market, and the AI buildout keeps pulling demand toward the chips it makes best. Even assuming growth slows to 14%, gross margin eases to 63.5% and a 25x exit multiple, the stock reaches $937 by 2031, a 17.75% annual return. Risks include China, rising capex, customer concentration and hyperscaler cuts. … Show more
Low forward earnings multiples across eleven stocks cannot persist indefinitely. Nvidia trades near 17.5x, its lowest in over a decade; Oracle near 15x, its lowest in six years. Uber is at 17x, Broadcom 19x, Vistra 15x, AppLovin 14.5x, TSMC 19x, Forgent Power Solutions 18x, Nokia 19.5x, American Express 17x and Western Digital 14x. x.com x.com x.com x.com x.com x.com x.com x.com x.com x.com x.comÂ
TSMC isn't cheap despite its worst losing streak since 2022: it is up 67% in 12 months and 245% in five years, and trades 1.5-2x more expensive than average. It becomes a buy in the $300s, lightly at first and more heavily under $350. x.com x.comÂ
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