The air in this town is thick with hype. Everyone’s chasing the ghost of artificial intelligence, throwing money at software that promises the moon. Fools’ gold, most of it. They’re looking at the glitter, not the gears. Me, I look for the guy building the gears.
This month’s sell-off in the software crowd? Predictable. A puff of wind can topple a house of cards. But the hardware side, the companies actually making something? They’re holding steady. The PHLX Semiconductor Sector index bumped up 14% in ’26, and that’s not an accident. It’s physics. It’s leverage.
AI needs silicon. It needs a foundation. And that foundation, as near as I can figure, is being poured by Taiwan Semiconductor Manufacturing (TSM 0.51%). They don’t get the headlines, the breathless pronouncements. They just make the stuff work. And that, in my book, is a beautiful thing.
Let’s be clear: TSMC isn’t building the future, it is the future. Or a substantial piece of it, anyway.
The Foundry of Dreams, and Dollars
Anthropic and their Claude model? Smart folks, playing a smart game. They’re getting a lot of ink, and rightly so. But they’re reliant on chips, designed by the likes of Nvidia, and made by TSMC. Google’s custom processors? Same story. Everyone wants the magic, but they all come to the same address.
Counterpoint Research says TSMC handles 99% of the AI server compute and custom processors. Ninety-nine percent. That’s not a market share; it’s a monopoly dressed in humility. They’re the silent partner in every AI success story, and that’s a position you can build a fortune on.
The numbers don’t lie. A 36% jump in revenue in ’25, hitting $122.4 billion. Earnings per share up 51%. And January ’26 showing a nearly 37% increase year-over-year. They’re not just growing; they’re accelerating. The kind of pace that makes other companies look like they’re standing still.
They’re likely to exceed their ’26 revenue target, and the whispers are they’re commanding higher prices for their advanced nodes. That’s a double play. Solid growth, and a widening margin. It’s the kind of combination that makes a man sleep soundly.
The Long Game: Silicon and Sentiment
RBC Capital Markets estimates AI chip sales could hit $550 billion by 2028. Half a trillion dollars. That’s a lot of sand being turned into something useful. And TSMC is positioned to capture a substantial slice of it. They’re not chasing the hype; they’re enabling it.
So, should you buy TSMC stock? The answer, my friend, is simple. The forward earnings multiple of 26 is in line with the tech-heavy Nasdaq-100. But TSMC’s earnings are growing faster. That means you’re getting more bang for your buck. It’s a solid company, playing a crucial role in a transformative technology. It’s not a gamble; it’s a calculated move.
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2026-02-15 13:42