Bank of America Securities Reiterates a Buy on Taiwan Semiconductor Manufacturing (TSM)

Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is one of the Most Profitable Stocks to Buy Now. On November 17, Mike Yang from Bank of America Securities reiterated a Buy rating on Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) with a $390 price target.

​The rating comes after the company, on November 11, announced the approval of a $14.98 billion budget for supporting its long-term capacity plans. Management noted they plan to use this investment for fab construction, expanding advanced technology and packaging capabilities, and funding research and development in 2026.

​Analyst Yang noted that the company’s robust capital expenditure has led to increased share in the foundry industry. He expects the company’s gross margins to remain robust at around 60% throughout 2027, supported by sales growing at a CAGR of 21%.

​In addition, the analyst also sees Taiwan Semiconductor Manufacturing Company Limited’s (NYSE:TSM) technological capability in the 2nm expansion and high-end packaging to be a significant competitive edge against its peers. Yang anticipates that this edge can potentially contribute to a 5% CAGR supply growth from 2025 to 2027.

​Taiwan Semiconductor Manufacturing Company Ltd. (NYSE:TSM) is the world’s largest dedicated semiconductor foundry. It produces advanced integrated circuits for global industries, including technology, communications, and automotive.

While we acknowledge the potential of TSM as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy Right Now.

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