We came across a bullish thesis on Taiwan Semiconductor Manufacturing Company Limited on Nikhs’s Substack. In this article, we will summarize the bulls’ thesis on TSM. Taiwan Semiconductor Manufacturing Company Limited's share was trading at $287.68 as of December 1st. TSM’s trailing and forward P/E were 29.81 and 23.92 respectively according to Yahoo Finance. Photo by JESHOOTS.COM on Unsplash TSMC has mastered the art of turning conservative guidance into a strategic advantage, consistently sandbagging ...

Without TSMC, the entire tech ecosystem would noticeably suffer.Semiconductors (chips) are the unsung heroes of the tech world, powering everything from smartphones to computers to TVs to car infotainment systems, and much more. Most of the time, these semiconductors are smaller than a grain of rice, yet they are to many electronics what a brain is to the human body.When it comes to bringing chips to life, no company does it better than Taiwan Semiconductor Manufacturing (TSM +0.51%) (also known as TSMC). T ...

Group 1: Nvidia - Nvidia's stock closed down 0.53% with a trading volume of $25.905 billion, with CFO Colette Kress highlighting that over 50% of the company's revenue comes from large cloud service providers (CSPs) [1][9] - Kress emphasized the ongoing need for computational resources among model developers, who must consider profitability and funding while ensuring sufficient computational capacity for future demands [1][9] Group 2: Tesla - Tesla's stock increased by 0.10% with a trading volume of $25.506 billion, as CEO Elon Musk confirmed that the Full Self-Driving (FSD) system now allows users to send text messages while driving under certain conditions [1][10] Group 3: Meta Platforms - Meta Platforms' stock rose by 1.80% with a trading volume of $14.051 billion, following reports that the company plans to cut its metaverse department budget by up to 30%, which analysts view positively as a sign of financial discipline [2][10] - The potential layoffs may affect Meta's virtual reality division, indicating a focus on efficiency and growth [2][10] Group 4: Netflix and Warner Bros - Netflix's stock fell by 2.89% with a trading volume of $13.054 billion, as the company announced a deal to acquire Warner Bros, including its film and television studios, for a total enterprise value of approximately $82.7 billion [2][10][11] - The acquisition will be financed through cash and stock, with Warner Bros shares valued at $27.75 each, translating to an equity value of $72 billion [2][10] Group 5: Other Companies - Broadcom's stock increased by 2.42% with a trading volume of $9.063 billion, as Oppenheimer raised its target price from $400 to $435 [12] - Palantir's stock rose by 2.16% with a trading volume of $5.697 billion, marking a 7.9% increase over the week [13] - Micron's stock increased by 4.66% with a trading volume of $4.918 billion, announcing a complete exit from its Crucial consumer storage business by March 2026 [14] - TSMC's stock rose by 0.61% with a trading volume of $3.041 billion, with the U.S. Commerce Secretary stating that TSMC will increase investments in the U.S. [15]

My last article on Taiwan Semiconductor Manufacturing Company Limited ( TSM ) was right after DeepSeek day. My perception was that the selloff was just creating a buying opportunity. Since then, the stock has reached new heights and has risen more than 40%. InEquity Research Analyst with a broad career in the financial market, covered both Brazilian and global stocks. As a value investor, my analysis is primarily fundamental, focusing on identifying undervalued stocks with growth potential. Feel free to rea ...

My last article on Taiwan Semiconductor Manufacturing Company Limited ( TSM ) was right after DeepSeek day. My perception was that the selloff was just creating a buying opportunity. Since then, the stock has reached new heights and has risen more than 40%. InEquity Research Analyst with a broad career in the financial market, covered both Brazilian and global stocks. As a value investor, my analysis is primarily fundamental, focusing on identifying undervalued stocks with growth potential. Feel free to rea ...

Core Viewpoint - Both Taiwan Semiconductor Manufacturing (TSMC) and ASML are positioned to benefit from the booming demand for chips driven by artificial intelligence (AI) data center buildout, but TSMC is expected to outperform in 2026 due to its pricing power and market position [2][14]. TSMC Overview - TSMC is the world's leading semiconductor contract manufacturer and one of only three companies capable of producing advanced chips at small node sizes, which enhances power efficiency [3][5]. - TSMC's market capitalization is $1,519 billion, with a current stock price of $296.51 and a gross margin of 57.75% [4][5]. - The company is expected to increase prices by 3% to 10% next year due to strong pricing power stemming from competitors' yield issues [6]. - TSMC projects a 40% compound annual growth rate (CAGR) for AI chip demand, particularly for graphics processing units (GPUs) [6]. ASML Overview - ASML holds a monopoly in the production of extreme ultraviolet (EUV) lithography machines, essential for manufacturing advanced chips, with no competitive alternatives available [8]. - ASML's market capitalization is $430 billion, with a current stock price of $1,107.46 and a gross margin of 52.70% [10][11]. - The company has developed next-generation High-NA EUV technology, which will further reduce node sizes, with new machines costing around $400 million each [11]. - A potential concern for ASML is the pull forward in demand for its older deep ultraviolet (DUV) machines from China, which may lead to fewer sales in 2026 [12]. Comparative Analysis - TSMC is trading at a forward price-to-earnings (P/E) ratio of under 23.5 times, while ASML's ratio exceeds 36.5 times, indicating TSMC is relatively cheaper [7]. - Both companies are expected to benefit from the proliferation of advanced chips, with AI being a current driver and future potential in areas like robotaxis and quantum computing [13]. - TSMC's stock is considered better positioned for 2026 due to its strong AI tailwind and competitive pricing, while ASML may face challenges due to earlier demand pull-forward [14].

Core Insights - Cerebras Systems has been awarded Demo of the Year for its AI Inference technology at the 2025 TSMC North America Technology Symposium, highlighting its significant innovation in the AI infrastructure space [1][3]. Group 1: Technological Achievements - Cerebras has developed a wafer-scale processor, the CS-3, which is 50 times larger than conventional processors, enabling AI workloads to run over 20 times faster than GPUs [2][8]. - The company’s flagship technology, the Wafer Scale Engine 3 (WSE-3), is the largest and fastest AI processor, outperforming the largest GPU by 56 times while consuming less power per compute unit [8]. Group 2: Market Adoption and Partnerships - Cerebras AI Inference is utilized in demanding environments globally, available through major cloud platforms such as AWS, IBM, and Hugging Face, and is adopted by sectors including healthcare, biotech, finance, and design [4][6]. - The technology supports critical national scientific research at U.S. Department of Energy laboratories and the Department of Defense, showcasing its versatility and reliability in high-stakes applications [4]. Group 3: Performance Metrics - Cerebras is recognized as the fastest platform for AI coding, generating code over 20 times faster than competing solutions, and consistently achieving the fastest inference speeds verified by independent benchmarks [5][8]. - The company serves trillions of tokens monthly across its cloud and on-premises deployments, indicating robust demand and operational scale [6].

Market Performance - US stock markets experienced an increase, with the Dow Jones rising over 100 points and both the Nasdaq and S&P 500 indices gaining approximately 0.4% [1] - Chinese concept stocks surged over 1%, with Baidu seeing a significant increase of over 5% [1] Key Indices and Stocks - The Nasdaq Golden Dragon China Index rose by 106.03 points, or 1.37%, reaching 7837.91 [2] - Notable stock performances included: - Baidu: +5.15% - Dada Group: +10.33% - Huya: +8.04% [3] Silver Prices - Spot silver prices surpassed $59, marking a new historical high [4] Economic Factors - Positive developments in US-China trade relations were highlighted, with discussions between Chinese and US officials aimed at enhancing cooperation and addressing mutual concerns [6] - US inflation data showed a core Personal Consumption Expenditures (PCE) price index annual rate of 2.8%, lower than the expected 2.9%, indicating a favorable economic outlook [7][8] - The US consumer confidence index rose for the first time in five months, with the preliminary December figure increasing from 51 in November to 53.3, reflecting improved consumer sentiment [9]

Core Viewpoint - The artificial intelligence megatrend is expected to be the primary driver for tech stocks as the market approaches 2026, despite various economic challenges [1]. Group 1: Portfolio Management - December is a crucial time for portfolio review and adjustments, including rebalancing and tax loss harvesting, with technology and AI remaining key sectors for investment [2]. Group 2: Key AI Stocks - Three recommended AI stocks for investment are Alphabet, Nvidia, and Taiwan Semiconductor Manufacturing [3]. Group 3: Alphabet - Alphabet is positioned to be a leading AI stock in 2026, having navigated legal challenges related to antitrust issues while maintaining its competitive advantages in search and advertising [4][6]. - The company generated $74.2 billion in advertising revenue in Q3, which constitutes over 70% of its total revenue, alongside $15.2 billion from Google Cloud [7]. - Alphabet is also expanding into data center architecture with its tensor processing units (TPUs), which are being leased to cloud clients and could become a significant profit center [8]. Group 4: Nvidia - Nvidia remains a dominant player in the AI processor market, with its data center sales contributing $51.2 billion to its total revenue of $57 billion in Q3 of fiscal 2026 [10]. - The company has established partnerships with major tech firms and is expected to generate $212.8 billion in revenue for the current fiscal year, with a forecast of $316 billion for 2027 [12][13]. Group 5: Taiwan Semiconductor Manufacturing - Taiwan Semiconductor Manufacturing Company (TSMC) is the largest chip foundry globally and is crucial for producing advanced AI chips for companies like Alphabet and Nvidia [14]. - TSMC is investing $165 billion to expand its operations in the U.S., with Q3 revenue of $33.1 billion, reflecting a 30% increase year-over-year, and net income of $15.1 billion, up by 39% [17].

Group 1 - The market continues to underestimate Taiwan Semiconductor Manufacturing Company Limited (TSM), which has been undervalued for years due to a lack of recognition of its uniqueness [1] - TSM is identified as a company with exceptional caliber, capable of reinvesting capital for impressive returns, with a long-term capability of capital compounding [1] - The ideal scenario for TSM is to demonstrate a high enough compound annual growth rate to potentially deliver tenfold returns or greater [1] Group 2 - The investment strategy focuses on maintaining a long-term perspective, which is believed to generate higher returns compared to the market index [1] - A conservative investment strategy is primarily adopted, with occasional pursuits of opportunities that have a favorable risk-reward ratio [1] - Careful consideration is given to ventures with substantial upside potential and limited downside, ensuring overall portfolio stability [1]