Skip to content
StockMarketAgent
Direct answer
TSM is the dominant global semiconductor foundry, leading in advanced nodes. Massive AI-driven demand from customers like Nvidia and AMD is driving strong near-term revenue growth and high CapEx, securing its position as vital infrastructure. Fair value range: low $376, high $734, with mid-point at $554.
Stock analysis

TSM Taiwan Semiconductor Manufacturing Company Limited fair value $554–$734

TSM
By StockMarketAgent.AI team· supervised by
Analyzed: 2026-05-10Next update: 2026-08-10Methodology v2.4Archetype: Growth infrastructureNYSE · Technology
View archive
Last price
$411.68
▲ +142.32 (+34.57%)
Fair value
$554
$554–$734
Rating
Strong Buy
confidence 88/100
Upside
+34.6%
upside to fair value
Margin of Safety
$470.90
buy below · 15%
Market Cap
$2.14T
P/E fwd 21.3

§1 Executive summary

  • Unmatched wide moat in advanced semiconductor manufacturing.
  • Significant upside driven by multi-year AI CapEx cycle from hyperscalers.
  • Robust balance sheet with a Piotroski F-Score of 9 offsets heavy reinvestment needs.
  • Primary risk remains geopolitical tension and cyclical digestion of AI capacity.
Fair value
$554
Margin of safety
+25.7%
Confidence
88/100
Moat
9/10

Educational analysis only — not financial advice. Always do your own due diligence.

$411.68Price
FV $554
High $734.11

TSM is the dominant global semiconductor foundry, leading in advanced nodes. Massive AI-driven demand from customers like Nvidia and AMD is driving strong near-term revenue growthRevenue growthYear-over-year change in revenue, expressed as a percentage. The starting point for any forward-earnings model and the lens through which scale, mix, and pricing power become visible. and high CapExCapital expendituresCash spent on acquiring or upgrading property, plant, and equipment. Splits into maintenance capex (sustaining current capacity) and growth capex (expanding capacity)., securing its position as vital infrastructure.

  • Process technology leadership (dominant in
    Process technology leadership (dominant in 3nm/2nm).
  • Massive capital scale creating insurmountable
    Massive capital scale creating insurmountable barriers to entry.
  • Bull thesis
    The massive $554 mid-point relies heavily on near-term AI forward earnings visibility.

§2 Bear case

Under a severe cyclical downturn compounded by geopolitical sanctions, TSM's heavy fixed CapExCapital expendituresCash spent on acquiring or upgrading property, plant, and equipment. Splits into maintenance capex (sustaining current capacity) and growth capex (expanding capacity). would crush margins. FCFFree cash flowOperating cash flow minus capital expenditures. The cash a business generates after maintaining and growing its asset base — the closest accounting proxy for owner-economics. would compress violently as revenue drops against structural depreciation burdens.

Ways this thesis can break

China Invasion/Blockade of Taiwan

· Low

A military escalation or blockade halting all fab operations, preventing global shipments and destroying terminal value.

FV impact
-100%
Trigger
Unpredictable

AI Super-Cycle Collapse

· Medium

Hyperscalers slash CapEx after realizing insufficient ROI on AI workloads, cratering advanced node utilization.

FV impact
-40%
Trigger
1-3 Years

Intel Regains Undisputed Leadership

· Low

Intel successfully executes 18A and regains technical supremacy, siphoning major fabless clients away from TSM.

FV impact
-25%
Trigger
2-4 Years
Early-warning signals to monitor
MetricCurrentTrigger threshold
Nvidia or AMD revising order forecasts down.MonitorDeterioration versus the report thesis
Significant delays in 2nm or A16 volume production.MonitorDeterioration versus the report thesis
Gross margins falling below 45% due to underutilization.MonitorDeterioration versus the report thesis
CapEx-to-Revenue ratio remaining unsustainably high without revenue growth.MonitorDeterioration versus the report thesis
Intel securing a tier-1 customer like Apple or Qualcomm for leading-edge.MonitorDeterioration versus the report thesis

§3 Financial history

Income statement — last six periods
Line itemT−0T−1T−2T−3CAGR
Period2022-12-312023-12-312024-12-312025-12-31Trend
Revenue$2,263.89B$2,161.74B$2,894.31B$3,809.05B+18.9%
Gross profit$1,348.35B$1,175.11B$1,624.35B$2,281.29B+19.2%
Operating income$1,121.23B$921.43B$1,322.00B$1,936.10B+20.0%
Net income$992.92B$851.74B$1,158.38B$1,697.60B+19.6%
EPS (diluted)$196.00$161.70$226.25$331.25+19.1%
EBITDA$1,593.08B$1,523.51B$2,079.13B$2,742.12B+19.8%
R&D$163.26B$182.37B$204.18B$246.43B+14.7%
SG&A$63.45B$71.46B$96.89B$99.22B+16.1%

Quality scores

Piotroski F-score
9 / 9
0–9 quality composite
Altman Z-score
3.08
Bankruptcy risk (>3 safe)
Beneish M-score
-2.48
Earnings manipulation risk
OCF / Net income
1.34×
>1 indicates high earnings quality
Accounting quality gate
Pass
Sector-adjusted gate
ROIC
25.3%
Return on invested capital
§3

Numbers analysis

Individual subscribers — §4 onwards11 more sections

Read the full analysis — 11 more sections.

Competitive moat, industry cycle, peer comparison, intrinsic valuation, sensitivity, scenarios, earnings decision tree, position management, investor perspectives, scorecard, and final recommendation.

Full report for every covered ticker
24 months of rating archive
Watchlist briefings + rating-change alerts
PDF + DOCX export in any language
Start free trial
Cancel anytime.
FAQ

TSM — frequently asked questions

  1. Based on our latest analysis, TSM looks meaningfully undervalued. The current price is $412 versus a composite fair-value midpoint of $554 (range $376–$734), which implies roughly 34.6% upside to the midpoint.

Related coverage

Names readers of TSM also follow

Same archetype: growth-infra