Forget Nvidia. Here’s the Company Behind the Chips

Quick Read

• TSMC (TSM) earns a BUY with a $516 price target, 27% upside, as AI demand exceeds its fab capacity at just 18x forward earnings.

• NVIDIA (NVDA) trades at 41x earnings versus TSMC’s 26x, yet every AI chip NVDA ships runs through TSMC’s fabs.

• Read More: Learn 7 ways to generate income with a $1,000,000+ portfolio (sponsor)

Every AI accelerator starts as a silicon wafer, and most of the world’s leading-edge wafers come from a single supplier. The 24/7 Wall St. price target for Taiwan Semiconductor Manufacturing (NYSE:TSM) is $516.16. That means 27.09% upside from $406.13, and the model rates TSMC a buy with high confidence.

24/7 Wall St. Price Target Summary

AI demand still exceeds TSMC’s supply, earnings are growing faster than the valuation multiple, and the shares have pulled back from their highs. With 79% of wafer revenue coming from 7nm and below, TSMC controls the most valuable real estate in the AI supply chain.

A Sharp Monthly Pullback After a Record Quarter

TSMC fell 2.87% over the past week and 10.89% over the past month, but it is still up 34.8% year to date. The stock trades about 16.7% below its 52-week high of $487.47 and 53.6% above its low of $264.34.

The drop came after a strong third-quarter report on October 15. EPS of $4.60 per ADR beat the $4.46…