TSMC (NYSE:TSM) Valuation Check After Strong Year-to-Date Share Price Run

Taiwan Semiconductor Manufacturing (TSM) has quietly added another solid week, with the stock up about 5% over the past month and nearly 20% in the past 3 months, extending a strong year-to-date run.

See our latest analysis for Taiwan Semiconductor Manufacturing.

That steady 1 month share price return around 5% sits within a much bigger move, with the stock now at about $310 and a powerful year to date share price return north of 50%. This reinforces the sense that momentum is still building rather than fading.

If TSM has you thinking more broadly about chips and compute, this is a good moment to scan other high growth tech and AI stocks that might share similar tailwinds.

Yet with earnings rebounding, revenue growing double digits, and the share price still nearly 20% below the average analyst target, investors face a familiar dilemma: Is TSM undervalued today or already pricing in tomorrow’s growth?

Most Popular Narrative Narrative: 0% Overvalued

According to oscargarcia, the narrative fair value sits almost exactly at today’s $310 share price, setting up a finely balanced valuation story.

TSMC is the central pillar of the global semiconductor ecosystem, powering the AI revolution with unmatched scale, cutting edge process technology, and disciplined execution. With record profits, dominant client base, and massive expansion underway, both in Taiwan and abroad, it stands as a low risk way to own the AI infrastructure wave.

Read the complete narrative.

Curious how this narrative justifies today’s price tag, almost to the dollar? The answer weaves together explosive profit growth, fortress like margins, and ambitious expansion math.

Result: Fair Value of $310.0 (ABOUT RIGHT)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent geopolitical tensions and rising costs from overseas fabs could quickly compress margins and cool sentiment if demand for AI technologies ever disappoints.

Find out about the key risks to this Taiwan Semiconductor Manufacturing narrative.

Another Lens on Value

While the narrative pins fair value right at $310, our DCF model paints a cooler picture, putting fair value closer to $225. At today’s price, that implies TSM may be trading rich, not cheap, which raises the question: how much AI optimism is already in the price?

Look into how the SWS DCF model arrives at its fair value.

Build Your Own Taiwan Semiconductor Manufacturing Narrative

If you see the story differently or want to test your own assumptions against the numbers, you can build a custom narrative in just minutes: Do it your way.

A great starting point for your Taiwan Semiconductor Manufacturing research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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