Key statistics

Is TSM a good stock to buy in 2026?

TSM stock presents a mixed bag for investors. While 72.0% of analysts rate it a Buy and it offers an 8.0% upside to the consensus target of $427.5, its P/E ratio of 29.64x, though lower than the sector average of 62.0x, contrasts sharply with a discounted cash flow (DCF) valuation of $153.06, suggesting the stock may be overvalued by over 61.3%. However, its strong profitability and growth metrics cannot be ignored when considering if TSM is a good stock.

2026 TSM price scenarios

Based on analyst consensus of $427.5 from 25 analysts. Not a prediction by Alert Invest.

About Taiwan Semiconductor Manufacturing Company Limited (TSM)

Taiwan Semiconductor Manufacturing Company Limited, together with its subsidiaries, manufactures, packages, tests, and sells integrated circuits and other semiconductor devices in Taiwan, China, Europe, the Middle East, Africa, Japan, the United States, and internationally. It provides a range of wafer fabrication processes, including processes to manufacture complementary metal- oxide-semiconductor (CMOS) logic, mixed-signal, radio frequency, embedded memory, bipolar CMOS mixed-signal, and others. The company also offers customer and engineering support services; manufactures masks; and invests in technology start-up companies; researches, designs, develops, manufactures, packages, tests, and sells color filters; and provides investment services.

Led by CEO C. C. Wei, Taiwan Semiconductor Manufacturing Company Limited operates with a workforce of 65,152 dedicated employees. TSM’s distinctive strength lies in its pure-play foundry business model, serving a vast array of fabless semiconductor companies globally. This strategic focus has allowed TSM to become the world’s largest dedicated independent semiconductor foundry, a critical enabler of the digital age.

TSM competitive moat and business analysis

Taiwan Semiconductor Manufacturing Company Limited commands a significant competitive advantage through its technological leadership and scale in advanced process nodes. The company boasts exceptional profitability metrics, with a net margin of 47.0%, reflecting its efficient operations and pricing power. While specific Return on Equity (ROE) and Return on Invested Capital (ROIC) figures are not readily available, the strong net margin indicates highly effective asset utilization and shareholder value creation.

TSM’s business is globally diversified, fabricating chips for a wide range of applications across various industries, including high-performance computing, smartphones, automotive, and IoT. While specific segmented revenue data for fiscal year 2025 is not detailed, TSM’s global reach ensures it serves leading technology companies worldwide. Its manufacturing facilities are primarily located in Taiwan, with expansion underway in other key regions to serve its international clientele, which spans major markets like the United States, Europe, and Asia.

The company’s competitive moat continues to strengthen, driven by its relentless investment in R&D and capital expenditures for next-generation fabrication technologies. TSM reported an impressive revenue growth of 33.0% year-over-year, indicating a rapidly expanding business and increasing demand for its leading-edge chips. This consistent growth trajectory demonstrates its ability to capture new market opportunities and maintain its leadership position in an intensely competitive industry.

When considering TSM stock and its competitive position against peers, it’s clear the company operates in a league of its own for foundry services. Direct comparisons reveal that while companies like TSM vs AMAT (Applied Materials) focus on equipment, TSM vs AMKR (Amkor Technology) specializes in packaging and test services, and TSM vs ASML provides critical lithography equipment, TSM remains the dominant player in actual wafer fabrication. This specialized focus and continuous innovation underpin TSM’s long-term business resilience and market leadership.

Taiwan Semiconductor Manufacturing Company Limited analyst rating

Based on 25 analysts. 72.0% rate TSM Buy or Strong Buy.

A 72.0% “Buy” rating from 25 analysts is indeed a strong endorsement within the highly dynamic Technology sector, suggesting significant confidence in TSM’s future performance and long-term potential. This level of consensus indicates that most experts believe TSM stock has solid fundamentals and growth prospects going forward.

Is TSM undervalued or overvalued?

Determining if TSM stock is undervalued or overvalued requires a multi-faceted approach. On one hand, TSM’s P/E ratio of 29.64x appears favorable when compared to the Semiconductors sector average of 62.0x, suggesting it trades at a significant discount relative to its industry peers. This could signal an attractive entry point for investors seeking value within the sector. However, other valuation metrics paint a different picture, raising questions about TSM valuation.

The Discounted Cash Flow (DCF) analysis estimates TSM’s fair value at $153.06, which is a substantial -61.3% below its current price. This wide discrepancy suggests that, based on future cash flow projections, TSM stock may be considerably overvalued. Furthermore, its P/B ratio of 9.71x and P/S ratio of 13.93x are notably higher than industry averages, indicating that investors are paying a premium for the company’s assets and sales. This complex TSM valuation landscape suggests that while the P/E ratio might offer a glimpse of value, other metrics urge caution.

TSM financial health & key metrics

For value investors, TSM stock presents a compelling case for its robust financial health and impressive growth, highlighted by a strong 33.0% revenue growth and an exceptional net margin of 47.0%, alongside very low debt-to-equity at 0.17x. While the discounted P/E ratio of 29.64x compared to the sector average of 62.0x could suggest an attractive valuation, the significantly lower DCF fair value of $153.06 (-61.3% from current price) and a weak FCF yield of 1.78% introduce a degree of caution regarding its intrinsic value at the current price.

Taiwan Semiconductor Manufacturing Company Limited earnings history & next report

Taiwan Semiconductor Manufacturing Company Limited reported EPS of $3.49, beating estimates by 5.44%. Next earnings: 2026-07-16 with EPS estimate of $3.66.

Investors will be closely watching TSM’s next earnings report on 2026-07-16, with analysts estimating an EPS of $3.66. Key areas to monitor will include any updates on demand for advanced node technologies, progress on global expansion plans in the U.S. and Japan, and management’s outlook on capital expenditures and the broader semiconductor market. Any deviation from this EPS estimate or shifts in guidance could significantly impact TSM stock price movements.

TSM daily short volume

Short volume data from FINRA CNMS Consolidated — shares sold short in the most recent US trading session. A high short ratio can signal bearish conviction or a potential short squeeze. Updated every trading day.

TSM insider trading activity

Corporate insiders must report trades to the SEC within two business days.

Source: SEC Form 4 via EDGAR · Data: Financial Modeling Prep · Not investment advice

Recent TSM analyst rating changes

Taiwan Semiconductor Manufacturing Company Limited stock news today

How does TSM compare to its peers?

Understanding TSM’s position within the broader Technology sector requires comparing it to key players that either operate in similar areas or provide complementary services. While Taiwan Semiconductor Manufacturing Company Limited is a pure-play foundry, its ecosystem involves equipment suppliers and other semiconductor service providers. This comparison highlights TSM’s unique strengths and potential competitive pressures.

FAQ — Taiwan Semiconductor Manufacturing Company Limited (TSM) stock