Company Overview - Taiwan Semiconductor Manufacturing Company Limited (TSM) has a current share price of around $228 and is experiencing strong performance due to the rising demand for artificial intelligence (AI) and the recovery in semiconductor stocks [1] - TSM is a dominant player in the semiconductor industry, controlling approximately two-thirds of the global third-party market and manufacturing chips for major AI companies like Nvidia, AMD, and Broadcom [3] Financial Performance - TSM reported first-quarter 2025 earnings of $2.12 per share, surpassing the Zacks Consensus Estimate of $2.03, resulting in an earnings surprise of 4.4% [4] - The company achieved revenues of $25.5 billion, exceeding the Zacks Consensus Estimate of $25.3 billion [4] - TSM's AI-chip business is projected to double in 2025, with annual AI-specific revenues expected to reach around $20 billion [5] Market Position and Growth - TSM is not only benefiting from a cyclical upswing in the semiconductor market but is also central to the structural transformation in computing driven by AI [5] - The company's CoWoS packaging margins exceed 60%, largely due to demand from AI and high-performance computing [5] - Year to date, TSM has grown 15.8%, outperforming its Zacks Peer Group, which advanced by 13.4% [7] Challenges and Risks - TSM faces headwinds from geopolitical tensions, particularly between the U.S. and China, and has allocated about $18 billion to hedge against Taiwan-dollar volatility [6] - Cybersecurity threats and supply-chain nationalization efforts pose additional risks as TSM expands its manufacturing facilities in the U.S., Japan, and Germany [6] Strategic Outlook - TSM is viewed as a backbone of AI infrastructure, with a long runway for growth as it supplies chips for various applications, including generative AI and AI-powered smartphones [8] - The company maintains a Zacks Rank 2 (Buy), indicating positive market sentiment towards its future performance [7]