This Top Chipmaker Stock Has Rallied More Than 200% in 5 Years, and It Still Looks Like a Cheap Buy

Group 1: Company Overview - Taiwan Semiconductor Manufacturing Company (TSMC) has a dominant position in the semiconductor foundry market, holding approximately two-thirds of the global market share, which positions it favorably for continued reliance from AI chip designers [3] - TSMC has achieved a remarkable 200% stock gain over the past five years, indicating strong performance and growth potential [2][6] - The company is planning to invest an additional $100 billion in U.S. production, complementing the previously announced $65 billion for manufacturing operations in Arizona, which may help mitigate tariff risks [5][8] Group 2: Competitive Landscape - Rival Intel is facing significant challenges, with its foundry business incurring losses of $13.4 billion in 2024, nearly double the previous year's loss of $7 billion, highlighting TSMC's competitive advantage [4] - Despite potential concerns regarding TSMC's presence in Taiwan and associated tariff risks, its critical role in the semiconductor industry makes it difficult for U.S. tech companies to switch to alternative manufacturers [7] Group 3: Financial Metrics - TSMC's operating profit margins are expected to be around 47.5% in the first quarter of this year, showcasing its profitability [5] - The company's price-to-earnings (P/E) ratio is currently below 26, which is considered low compared to the Technology Select Sector SPDR Fund's average of 36, indicating an attractive valuation for investors [6] Group 4: Investment Outlook - TSMC is viewed as an underrated investment opportunity, particularly with the ongoing growth in AI, suggesting that it may still be a good time for investors to consider adding TSMC to their portfolios [8] - The stock has experienced a 14% decline since the beginning of the year, which may be perceived as an overreaction to tariff threats, reinforcing the long-term investment potential in TSMC [9]