Taiwan Semiconductor's 2026 Outlook Is a Clear Sign to Buy the Stock Now

Core Insights - Taiwan Semiconductor Manufacturing (TSMC) was one of the top-performing stocks in 2025, with a rise of over 50%, but the focus now shifts to maintaining that momentum in 2026 [1] - The company recently reported strong fourth-quarter earnings and provided optimistic guidance for 2026, indicating that the market has not fully recognized its dominance [2] Financial Performance - In Q4, TSMC's revenue increased by 26% year over year in U.S. dollars, demonstrating strong growth [6] - For 2026, TSMC anticipates revenue growth of nearly 30% in U.S. dollars, reflecting ongoing demand for AI-related chips [6] - The company projects a compound annual growth rate (CAGR) of about 25% from 2024 to 2029, highlighting the significant demand for logic chips [7] Market Position - TSMC is the largest chip supplier globally and plays a crucial role in the AI computing landscape, supplying major companies like Nvidia and Apple [5] - Despite its success, TSMC is considered a great value in the market, trading at a slight premium to the overall market but at a discount compared to larger tech peers [8]