Buying and holding companies for the long term is a mindset that every investor should adopt. The goal of long-term investing is to identify the best companies and hold them until they're no longer exceptional, thereby generating a substantial profit along the way. Some stocks have more robust investment cases than others, but one that I particularly like is Taiwan Semiconductor Manufacturing (TSM).I've got 10 reasons why it's an excellent stock to buy now and hold forever, as it looks like a stellar deal. ...

Core Viewpoint - Taiwan Semiconductor Manufacturing Company (TSMC) is positioned as a top stock pick due to its strategic moves to mitigate geographical risks and its ability to meet the growing demand for chips through new technology rollouts [1][2]. Group 1: Global Footprint Expansion - TSMC is diversifying its global footprint to address risks associated with tariffs and potential geopolitical tensions, with a $65 billion facility in the U.S. and an additional $100 billion investment for further production capacity [5][6]. - The company is also establishing facilities in Germany and Japan, which reduces reliance on Taiwan for revenue generation [5][6]. Group 2: Technological Advancements - TSMC is set to launch 2nm and 1.6nm chips in late 2025 and 2026, respectively, which promise significant improvements in power consumption—20% to 30% for 2nm and 15% to 20% for 1.6nm compared to 3nm chips [8]. - The reduction in power consumption is expected to drive demand, particularly from data centers looking to lower operational costs [9]. Group 3: Growth Projections - TSMC's management anticipates a 45% compound annual growth rate (CAGR) for AI-related chip revenue over the next five years, with overall revenue CAGR expected to approach 20% [10]. - If TSMC meets its revenue growth projections, it could see a nearly 150% increase in revenue over five years, making it a compelling investment opportunity [11]. Group 4: Stock Valuation - TSMC's stock is currently trading at just under 21 times forward earnings, which is cheaper than the S&P 500's approximately 22 times forward earnings, indicating that the stock is not priced at a premium despite its growth potential [12][14]. - This valuation suggests that investors can buy TSMC stock with confidence, as it is aligned with market averages [14].

Core Viewpoint - Taiwan Semiconductor (TSMC) is expected to outperform the market significantly over the next five years, with an estimated 129% gain driven by strong management insights and technological advancements [2][6][13] Company Overview - TSMC is the world's largest chip foundry, serving major tech companies like Apple and Nvidia, which rely on TSMC for manufacturing their chips [4] - The company is recognized for its cutting-edge technology, currently producing 3nm chips and working towards 2nm and 1.6nm chips [5] Growth Projections - TSMC's management anticipates AI-related revenue to grow at a 45% compound annual growth rate (CAGR), with overall revenue expected to approach a 20% CAGR [6] - By the end of 2024, TSMC's revenue is projected to reach $90.1 billion, potentially rising to $206 billion with an 18% growth rate [6][7] Investment and Production Strategy - TSMC has announced a $100 billion investment to enhance manufacturing capabilities in the U.S., which is expected to secure its position as a sole source supplier for many clients [8][9] - This investment will not immediately impact TSMC's income statement, as expenses will be recognized through depreciation over time [10] Profitability and Valuation - While TSMC's profit margins may experience a temporary dip due to increased operating expenses from hiring staff, margins are expected to return to current levels by the end of the five-year period [11] - TSMC's stock is trading at its five-year average price-to-earnings (P/E) level, indicating it is not overpriced and future growth is likely to stem from demand rather than earnings expansion [11][13]