TSMC Stock Seen as Undervalued Amid Market Dominance

Published 8 hours agoTSM

TSMC Stock Seen as Undervalued Amid Market Dominance

An analyst has recently emphasized the strong appeal of Taiwan Semiconductor Manufacturing Company (TSMC), describing the company's stock as "cheap" and noting a significant lack of alternatives in the market. TSMC's price-to-earnings (P/E) ratio currently stands at 21.7x, which contrasts sharply with a fair P/E ratio estimate of 46.8x, suggesting the stock is undervalued. According to simplywall.st, the consensus among 30 analysts places a 12-month average price target for the stock at NT$1,439.44, marking a potential upside of about 46.6% from its present price.

Taiwan Semiconductor Manufacturing holds a commanding position in the industry with over 60% of the global contract chip manufacturing market share. It's not just market position that's bullish; the company's financial health is robust as well. As reported by FT.com, TSMC recently saw a 30% year-on-year increase in net revenue for May, reaching $7.1 billion and contributing to an overall market valuation of $738 billion.

TSMC is solidifying its growth prospects by diversifying its offerings into custom processors for AI and data centers, catering to major clients such as Google, Microsoft, Amazon, Qualcomm, and AMD. This expansion into high-demand sectors underscores TSMC's strategy to augment its market dominance and reinforce its status as an essential player in the semiconductor space.

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