TSM - TSMC: 3 Reasons To Buy This Semiconductor Play
2024-06-20 23:11:04 ET
Summary
- TSMC reached a new 1-year high on optimism for consistent top line growth.
- Market share gains and record Q1 results drive revenue growth.
- The firm's free cash flows are growing significantly faster than revenues, which in turn translates to significant potential for EPS estimate upside revisions.
- Shares are attractively valued and have a fair value north of $207 per share. The risk profile in the context of accelerating FCF growth is also favorable.
Taiwan Semiconductor Manufacturing Company ( TSM ) just reached a new 1-year high on optimism that the chip company can back up its valuation with consistent top line growth. Taiwan Semiconductor Manufacturing’s first fiscal quarter results also showed considerable promise in this regard. The chipmaker also achieved sequential market share growth in its core business and is seeing its free cash flows growing much faster than its revenues. As a result, TSMC is on a free cash flow upswing and set to FCF margin expansion. Due to rising demand and adoption of customized AI chips, I believe Taiwan Semiconductor continues to have considerable revaluation potential, despite a 73% year-to-date gain!...
TSMC: 3 Reasons To Buy This Semiconductor Play