How this AMAT vs TSM comparison is calculated

All metrics are based on trailing twelve months (TTM) financial data, consensus analyst estimates, and standardized valuation ratios. Data is sourced from Financial Modeling Prep and SEC EDGAR. Figures are normalized to ensure a fair comparison between Applied Materials, Inc. and Taiwan Semiconductor Manufacturing Company Limited. Analyst price targets and ratings are aggregated from Wall Street consensus as of 2026-05-19.

Quick verdict: Applied Materials, Inc. vs Taiwan Semiconductor Manufacturing Company Limited in 2026

Applied Materials, Inc. (AMAT) and Taiwan Semiconductor Manufacturing Company Limited (TSM) both operate within the highly dynamic semiconductor industry, yet they present distinct investment profiles for 2026. While Taiwan Semiconductor Manufacturing Company Limited exhibits a clear lead in revenue expansion, profitability, and overall valuation metrics, AMAT garners stronger conviction from Wall Street analysts and offers a significantly higher implied price target upside. Investors must carefully weigh TSM’s superior operational efficiency and growth trajectory against Applied Materials, Inc.’s more optimistic near-term analyst sentiment. Not investment advice.

Applied Materials, Inc. vs Taiwan Semiconductor Manufacturing Company Limited: key metrics side by side

A full side-by-side look at Applied Materials, Inc. (AMAT) and Taiwan Semiconductor Manufacturing Company Limited (TSM) across earnings multiples, profitability, revenue momentum, and analyst sentiment — data updated 2026-05-19.

Relative valuation: AMAT vs TSM

When assessing the relative valuation between these two semiconductor giants, Taiwan Semiconductor Manufacturing Company Limited appears to trade at a more attractive earnings multiple compared to Applied Materials, Inc. TSM’s trailing twelve-month price-to-earnings ratio stands at 29.64x, which is notably lower than the 38.6x multiple observed for AMAT. This significant price-to-earnings gap suggests that investors are currently paying less for each dollar of earnings from Taiwan Semiconductor Manufacturing Company Limited. Beyond the primary earnings multiple, the price-to-book ratio further reinforces this divergence, with TSM boasting a P/B of 9.71x against Applied Materials, Inc.’s considerably higher 13.73x.

Furthermore, a look at the discounted cash flow (DCF) valuation, based on current consensus data, reveals a more favorable position for TSM, despite both companies showing a negative DCF upside. Taiwan Semiconductor Manufacturing Company Limited registers a DCF upside of -61.3%, indicating a less severe overvaluation compared to the stark -184.8% for Applied Materials, Inc. This fundamental discount in TSM’s multiples, combined with a less pronounced negative DCF, positions Taiwan Semiconductor Manufacturing Company Limited as the more attractively valued stock among the two based on traditional metrics, suggesting it carries less speculative premium than AMAT at present.

Revenue momentum: Applied Materials, Inc. vs Taiwan Semiconductor Manufacturing Company Limited

Examining the revenue momentum, Taiwan Semiconductor Manufacturing Company Limited demonstrates a significantly more robust topline expansion compared to Applied Materials, Inc. TSM posted an impressive year-over-year revenue growth of 33.0%, reflecting strong demand for its advanced chip manufacturing services. This considerable expansion highlights Taiwan Semiconductor Manufacturing Company Limited’s pivotal role in the global technology supply chain, driven by ongoing advancements in AI, high-performance computing, and mobile technologies. The scale of TSM’s operations is also vast, with revenues reaching $3848.51 billion, dwarfing the $28.37 billion reported by AMAT.

In stark contrast, Applied Materials, Inc. showed a more modest revenue increase of 4.4% over the same period. While positive, this growth rate trails substantially behind TSM’s performance, indicating a potentially slower pace of expansion for the semiconductor equipment manufacturer relative to the foundry leader. Furthermore, the EBITDA margin provides another perspective on operational efficiency during this growth, with Taiwan Semiconductor Manufacturing Company Limited achieving an impressive 71.17% compared to Applied Materials, Inc.’s 36.82%. This substantial difference in operational leverage underscores TSM’s superior ability to convert revenue into core operating profit. Investors should note that while this growth gap is currently wide, future estimates may vary depending on evolving market conditions and investment cycles within the semiconductor industry, meaning this gap may not persist indefinitely.

Profitability and cash generation: AMAT vs TSM

When it comes to profitability and cash generation, Taiwan Semiconductor Manufacturing Company Limited exhibits superior margins and efficiency compared to Applied Materials, Inc. TSM’s net margin stands at an impressive 47.0%, indicating that nearly half of its revenue is converted into net profit. This high level of profitability underscores Taiwan Semiconductor Manufacturing Company Limited’s competitive advantage and strong pricing power within its segment of the semiconductor industry. Such robust margins typically reflect efficient cost management and a dominant market position.

Applied Materials, Inc., while also profitable, demonstrates a lower net margin of 29.31%. Although a healthy figure for many industries, it falls considerably short of TSM’s cash conversion capabilities. While the return on equity (ROE) for both companies is currently reported as N/A%, limiting direct comparison on this specific metric, the free cash flow (FCF) yield offers a glimpse into their ability to generate cash relative to their stock price. Applied Materials, Inc. boasts an FCF yield of 1.82%, slightly edging out Taiwan Semiconductor Manufacturing Company Limited’s 1.78%. This minor difference suggests that despite TSM’s higher profitability, AMAT is slightly more efficient at generating free cash flow per unit of market capitalization, though both figures are relatively tight.

Wall Street view: Applied Materials, Inc. vs Taiwan Semiconductor Manufacturing Company Limited analyst ratings

The sentiment among Wall Street analysts provides an interesting contrast between Applied Materials, Inc. and Taiwan Semiconductor Manufacturing Company Limited, with analysts showing a slightly higher bullish consensus for the former. Applied Materials, Inc. currently has a “Buy” consensus rating, with a robust 79.3% of the 53 analysts covering AMAT recommending a “Buy.” This strong endorsement translates into a consensus price target of $514.45, suggesting a significant potential upside of +24.4% from its current trading price. Such a high percentage of buy ratings and a substantial projected upside often signal strong analyst confidence in the company’s future performance and growth prospects within the semiconductor equipment sector.

Taiwan Semiconductor Manufacturing Company Limited also holds a “Buy” consensus rating, but with a slightly lower percentage of buy recommendations at 72.0% among the 25 analysts covering TSM. The consensus target for Taiwan Semiconductor Manufacturing Company Limited is $427.5, which implies a more modest upside of +8.0% from its current price. While a “Buy” rating is certainly positive, the lower percentage of enthusiastic recommendations and the smaller projected price target upside suggest that analysts, on average, see less near-term capital appreciation potential for TSM compared to Applied Materials, Inc. It is important to remember that these price targets may vary depending on future estimate revisions and shifts in market conditions.

Which investor profile fits AMAT vs TSM?

For a growth-oriented investor, Taiwan Semiconductor Manufacturing Company Limited (TSM) appears to be the more compelling choice between the two companies. TSM’s impressive year-over-year revenue growth of 33.0% significantly outpaces Applied Materials, Inc.’s 4.4% expansion, indicating a much stronger momentum in its core business. Furthermore, Taiwan Semiconductor Manufacturing Company Limited’s vastly larger revenue base of $3848.51 billion and exceptional EBITDA margin of 71.17% suggest superior scaling capabilities and operational efficiency that underpin its growth trajectory. These factors point towards TSM as a primary beneficiary of the ongoing demand for advanced semiconductors, aligning well with a growth investment thesis.

Value investors, scrutinizing earnings multiples and fundamental discounts, might also lean towards Taiwan Semiconductor Manufacturing Company Limited. AMAT currently trades at a price-to-earnings ratio of 38.6x, considerably higher than TSM’s 29.64x. This lower earnings multiple for Taiwan Semiconductor Manufacturing Company Limited presents a more attractive entry point relative to its earnings power. Additionally, the price-to-book ratio is more favorable for TSM at 9.71x compared to Applied Materials, Inc.’s 13.73x. Although both companies show negative discounted cash flow (DCF) upsides, TSM’s -61.3% is far less negative than AMAT’s -184.8%, suggesting that Taiwan Semiconductor Manufacturing Company Limited is less overvalued by this metric, offering a comparatively better value proposition.

For income-focused investors, neither Applied Materials, Inc. nor Taiwan Semiconductor Manufacturing Company Limited currently presents a strong case for significant dividend income. AMAT reports a 0.0% dividend yield, meaning it distributes no portion of its earnings to shareholders in this form. TSM, while having a slightly positive dividend yield of 0.01%, is effectively negligible and would not appeal to investors seeking regular income streams. Therefore, investors prioritizing dividends would likely need to look elsewhere, as both companies predominantly reinvest their earnings back into their capital-intensive businesses for future growth rather than paying out substantial dividends. This is not investment advice. Always do your own research.

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