Semiconductors are critical for so much technology we use today. Does that mean you should buy something like Taiwan Semiconductor stock (NYSE: TSM)?
Taiwan Semiconductor (TSMC) is a major player in the industry. It produces microchips for many leading technology companies:
- Apple.
- Advanced Micro Devices.
- Broadcom.
- Intel.
- NVIDIA.
- And many, many more.
The company has been a leader in the semiconductor space since its inception in 1987 and continues to be one of the most profitable chipmakers in the world today.
In this blog post, we’ll take a closer look at TSMC’s business. We’ll also look at Taiwan Semiconductor stock through the lens of our Stock Power Ratings system to determine if it’s one to buy, watch or steer clear of.
TSMC’s Product Portfolio
TSMC produces a wide range of chips used by technology companies around the world. This includes processors, graphics cards, memory chips, sensors and other components.
One of its most popular products is the A-series processor used by Apple devices such as iPhones and iPads. The company also produces chips for other major tech companies like Qualcomm, Nvidia, and AMD.
Looking ahead to 2023, TSMC is expected to continue its dominance within the industry due to its strong product portfolio and continued investment in research & development.
The company is ramping up production of its 3nm process node, which bring even more efficient chips with better performance.
Additionally, TSMC is investing heavily into artificial intelligence (AI) research which could open up new opportunities for the company in the future.
As an investor looking at Taiwan Semiconductor stock for potential returns, it’s important to consider both short-term factors such as quarterly earnings reports as well as long-term factors such as R&D investments or potential partnerships with other tech giants.
TSMC has consistently delivered strong financial results over time and analysts expect this trend to continue going forward with greater growth potential given their recent investments into AI research.
Does that mean Taiwan Semiconductor stock is one to buy for 2023? Let’s check out our proprietary system to find out.
Taiwan Semiconductor Stock Power Ratings
Taiwan Semiconductor stock rates a “Neutral” 57 out of 100. That means our system expects the stock to perform in line with the broader market over the next 12 months.
TSM’s Stock Power Ratings in January 2023.
I want to focus on TSM’s momentum.
Over the last 12 months, Taiwan Semiconductor stock has lost 25% of its value. For comparison, the broader S&P 500 lost almost 9% over the same time frame.
That’s why the stock only rates a 25 out of 100 on our momentum factor.
But that rating could improve. Looking at the shorter-term, Taiwan Semiconductor stock has gained almost 5% over the last month.
That’s not the “maximum momentum” we like to see in stocks, but it’s a trend in the right direction.
Bottom Line: Taiwan Semiconductor remains one of the most profitable chipmakers today. It has contracts with some of the biggest tech by tech giants such as Apple, Qualcomm, Nvidia and AMD while also exploring new areas such as AI research.
But our Stock Power Ratings system says Taiwan Semiconductor stock is just one to watch for now.