TSMC: A Rather Sensible Investment, Don’t You Think?

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The market, as usual, is being frightfully temperamental. All this fuss about volatility… really. One does wish people would simply make up their minds. Artificial intelligence, naturally, is the current obsession, and with it, a tiresome round of questions about data centers and which companies might find themselves… inconvenienced.

Some of these AI-related stocks are exhibiting a distinct lack of backbone, retreating as if faced with a particularly stern headmistress. Taiwan Semiconductor Manufacturing – TSMC, if one is feeling lazy – however, continues to perform admirably, up a rather pleasing 65% over the last year. One shouldn’t begrudge anyone taking a profit, of course. It’s simply… sensible. But to assume that’s the end of the story? My dear, that would be terribly shortsighted.

There’s a perfectly good reason to believe TSMC has further to climb. And it’s not simply a matter of blind optimism, though a touch of that never does any harm. Let’s examine the situation with a modicum of intelligence, shall we?

A Message in Silicon, If You Please

TSMC, you see, is the rather indispensable chap when it comes to chip foundries. Nearly three-quarters of the global revenue in chip manufacturing flows through their hands. They’re the discreet power behind companies like Nvidia, quietly producing the cutting-edge chips that make all this AI nonsense possible – and, indeed, underpin virtually every technological application one can imagine.

Naturally, their fortunes are tied to these data center investments. One can’t help but wonder if some of this spending is… sustainable, particularly in the case of companies like OpenAI, which seem to be perpetually seeking funds to match their ambitions. Still, Big Tech appears firmly committed to this AI game. Alphabet and Amazon, for example, are ramping up spending for 2026 to the tune of $185 and $200 billion respectively. Researchers estimate total global data center investments could approach $7 trillion by 2030. A rather substantial sum, wouldn’t you agree? And a considerable portion of that, inevitably, will flow through TSMC.

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A Bargain, Dare I Say?

Quite simply, TSMC is too dominant, and the pace of AI development is far too swift for any competitor to seriously challenge their position. They’ve actually increased their market share since this AI boom began, which, frankly, is rather impressive.

Analysts predict the company will enjoy earnings growth of around 25% annually over the next three to five years. Despite the stock already enjoying a 65% rise, it still trades at just under 25 times this year’s earnings estimates. A bargain, one might even say, given the growth projections and their stranglehold on AI chip production. It’s a remarkably secure position, and one doesn’t often encounter such stability in this rather frantic market.

Provided Taiwan Semiconductor Manufacturing continues to deliver as expected – and one has every reason to believe they will – it seems highly probable the stock will reach new heights over the next year. A sensible investment, wouldn’t you say? One wouldn’t want to miss out, after all.

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2026-02-11 20:22