Analyst Says Taiwan Semiconductor (TSM) One of the Top 'Horsemen' of Semiconductor Industry

Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is one of the 10 Stocks to Watch in July as AI Enthusiasm Returns.

Jordan Klein, Tech Media & Telecom Analyst at Mizuho, recently talked about TSM during a program on CNBC.

"If I zoom out and I say what stocks do I really like the most, I say you can't really mess with the three horsemen of what works, what's been working great, and that's Taiwan Semi. They benefit whether a customer buys an ASIC chip, which is custom, or a GPU from Nvidia."

Hardman Johnston Global Equity Strategy stated the following regarding Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) in its Q1 2025 investor letter:

The top sector detractors from relative performance during the quarter were Information Technology and Energy. Within Information Technology, Marvell Technology, Inc. and Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) were the top underperformers. TSMC posted very strong results and a bullish outlook for 2025 to start the year, supporting the strength in the stock and the fundamental growth outlook for the business. However, shares of TSMC have been under pressure as new concerns have emerged in the AI semis landscape. These began with the release of the DeepSeek R1 model, but concerns have escalated since, primarily due to the risk of macro uncertainty causing reduced corporate spending. The share price correction has been entirely related to multiple contraction, as there has been no true adjustment to TSMC’s earnings expectations. Given TSMC already trades at a discount to broader semis, despite its monopolistic position in leading edge foundry, we believe much of the recent selloff creates an attractive dislocation in the valuation.

While we acknowledge the potential of TSM as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.