It has been less than a month into the second Trump administration, and there has been no shortage of shock and awe both in the U.S. and abroad. For foreign-based firms, such as Taiwan Semiconductor Manufacturing (NYSE:TSM), there has been a newfound need to navigate murky waters amidst the ever-present threat of tariffs.
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Recently, a new wrinkle surfaced as news broke that the White House had approached TSM to consider purchasing a stake in Intel in a bid to promote greater U.S. domestic chip manufacturing. While the news was short on details, such a potential move could further shake up an uncertain market.
One investor known by the pseudonym Bluesea Research believes that the current dynamics make TSM well-placed to continue building its lead over any would-be competitors.
“TSM stock can be a big winner amid tariff tensions as the company increases its presence within the US, after the recent White House request,” explains the 5-star investor.
Currently, Bluesea notes that TSM holds a strong and growing lead over Intel when it comes to semiconductor process nodes. The investor further details that Intel’s internal issues – the dismissal of the former CEO, low yields in its 18A node – could cause its foundry operations to slip further behind TSM.
Of course, not every development emanates from the White House.
Bluesea also mentions the groundbreaking DeepSeek revelations, and how a shifting focus away from computing power could negatively impact TSM’s revenues by decreasing demand for high-end AI chips. However, even here, the investor is not too worried by these concerns.
“TSM has a massive moat and any demand postponed will eventually be captured by the company,” the investor adds.
Earlier this month, the company announced a strong revenue and earnings beat, while guiding for 28% EPS growth in the current fiscal year and 18% EPS growth for the following one. Despite these bullish projections, the stock is trading at a Forward Price-to-Earnings multiple of 19.67x, which Bluesea mentions is less than other tech firms, including Nvidia.
TSM is “a good option in the AI industry at the current price,” concludes Bluesea, who is rating TSM shares a Buy. (To watch Bluesea Research’s track record, click here)
Wall Street is also bullish regarding TSM’s prospects. With 5 Buy and 1 Hold rating, TSM enjoys a Strong Buy consensus rating. Its 12-month average price target of $243.67 would yield gains just shy of 20% in the year ahead. (See TSM stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
