Taiwan Semiconductor predicted to have 129% gain in 5 years due to innovative technology.

From Yahoo Finance: 2025-05-17 06:45:00

Taiwan Semiconductor (NYSE: TSM) is predicted to have a 129% gain in the next five years due to its leading position as the world’s largest chip foundry. The company’s innovative technology allows for the production of cutting-edge 3nm chips, with plans for even smaller chips in the future.

With Taiwan Semi’s unmatched insight into chip demand, management anticipates significant revenue growth, particularly in AI-related sectors. This growth could lead to a 45% compound annual growth rate (CAGR) in AI revenue and a near 20% CAGR in overall revenue over the next five years.

As a sole source supplier for major tech companies like Apple and Nvidia, Taiwan Semi is well-positioned to capitalize on the AI boom. Despite potential margin fluctuations due to tariffs and increased operating expenses, TSMC’s stock isn’t overpriced and has the potential to more than double in value over the next five years.

Taiwan Semiconductor’s $100 billion investment in expanding U.S. manufacturing capabilities won’t affect its income statement but may temporarily impact profit margins. Despite potential short-term fluctuations, TSMC’s stock is currently trading at a reasonable level based on its historical price-to-earnings ratio.

Investors should consider Taiwan Semiconductor’s strong market position and growth potential in the AI sector. While the stock isn’t featured in the Motley Fool’s top 10 stock picks, historical data shows the potential for significant returns over the long term.



Read more at Yahoo Finance: Taiwan Semiconductor Stock Could Surge by 129% in the Next 5 Years