Taiwan Semiconductor Manufacturing Company (NYSE:TSM) has not escaped the commotion in the markets over the last few months, as tariff worries ran rampant. The company share price is down over 20% year-to-date, though other issues – such as a 6.4 magnitude earthquake that hit Taiwan in late January – also contributed to these losses.
And yet, the company – which released its Q1 2025 earnings today – continues to churn out strong numbers. The company’s Q1 revenues of $25.53 billion represented a 35.3% year-over-year increase – although it was a 5.1% decline from Q4 2024. (The company chalked this decrease up to “smartphone seasonality.”)
Still, the big question mark plaguing the company is the unknown geopolitical issues swirling throughout global commerce. How will the company manage to navigate these stormy waters?
Even before TSMC reported its latest results, one investor known by the pseudonym Noah’s Arc Capital Management was feeling good about its prospects – especially as the company continues to move its production onto American shores.
“I think the current valuation mismatch provides significant upside potential for investors willing to be in a Taiwan company that is becoming more American with every semiconductor it produces,” declares the investor.
The investor points to TSMC’s recently opened Phoenix, Arizona plant, which is making “incredible” progress. Noah’s Arc notes that the company’s 4-nanometer line is already yielding 4% more usable chips than its Taiwanese counterparts, a strong signal that the American investment is paying off. Nvidia, for instance, is producing some of its Blackwell GPUs at the Phoenix plant.
And, despite the falling share price this year, Noah’s Arc offers a reminder that the company has gained some 50% since the beginning of 2024. The investor expects this growth, driven by the AI revolution, to continue.
“This is incredible growth and well ahead of the market. The company is still a compounder,” adds Noah’s Arc.
The move to diversify their operations by focusing on U.S. manufacturing is further confirmation that the company is on the right track – and well-placed to weather future tariff concerns.
“With the firm getting serious about U.S. production capacity, I think that the company is in an even greater spot,” concludes Noah’s Arc, who rates TSMC a Strong Buy. (To watch Noah’s Arc Capital Management’s track record, click here)
This seems to be the view on Wall Street as well. With 6 Buy and 1 Hold ratings, TSMC enjoys a Strong Buy consensus rating. Its 12-month average price target of $240.83 would see gains approaching 60% in the year ahead. (See TSMC 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.