From Nasdaq: 2024-09-14 06:30:00

Nvidia has seen an impressive 118% gain in 2024. Despite strong quarterly reports, investor confidence is waning due to the stock’s high valuation, trading at 27 times sales and 50 times earnings. Taiwan Semiconductor Manufacturing (TSMC) is a cheaper alternative with a 56% gain, strong revenue growth, and expanded market opportunities.

TSMC’s revenue is up 31% year-over-year with expectations of exceeding 26% growth in 2024. TSMC’s Foundry 2.0 plan targets a $250 billion market, allowing for potential revenue growth to $150 billion. With increased capacity and market share, TSMC is poised for long-term growth, outperforming Nvidia in the future.

Analysts expect TSMC’s earnings to grow at 21.5% annually, lower than Nvidia’s 52% growth. TSMC’s forward earnings multiple of 20 indicates potential for a 114% stock price increase in the next five years. Meanwhile, Nvidia’s rich valuation at 37 times earnings may limit its upside potential. TSMC has the potential to deliver stronger gains over the long run.

Considered by the Motley Fool Stock Advisor team, TSMC is not among the 10 best stocks to buy now. However, investing in TSMC could result in substantial returns, similar to Nvidia’s growth in the past. With a track record of outperforming the S&P 500, TSMC presents a compelling investment opportunity for long-term growth.



Read more at Nasdaq: Prediction: This Incredibly Cheap but Fast-Growing Semiconductor Stock Could Outperform Nvidia