TSM Jumps 34% Over Half a Year: Does the Stock Remain a Good Investment?

TSMC: Leading the Tech Market Amid Global Uncertainty

Taiwan Semiconductor Manufacturing Company (TSMC), commonly referred to as TSMC, has emerged as one of the top-performing technology stocks despite ongoing economic and geopolitical headwinds. Over the past half-year, TSMC shares have surged by 33.8%, significantly outpacing the Zacks Computer and Technology sector, which saw a modest 3.4% increase during the same timeframe.

TSMC also stands out among semiconductor giants such as Advanced Micro Devices (AMD), NVIDIA (NVDA), and Broadcom (AVGO). In the last six months, AMD's stock climbed 28.6%, NVIDIA rose 4%, while Broadcom experienced a 4.8% decline.

Investor Confidence Grows for TSMC

This strong performance signals that investors are increasingly optimistic about TSMC’s future, even as market volatility persists due to trade disputes and geopolitical risks. The company’s solid fundamentals and growth prospects support a positive outlook, making TSMC an attractive buy at present.

TSMC Six-Month Price Return Performance

Source: Zacks Investment Research

Exceptional Financial Results Fuel TSMC’s Growth

TSMC has capitalized on the surge in artificial intelligence by producing advanced chips for major AI clients, including AMD, NVIDIA, and Broadcom. This has led to unprecedented profits and revenue expansion.

For the 2025 fiscal year, TSMC’s revenue soared 35.9% year-over-year to $122.42 billion, while earnings per share jumped 51.3% to $10.65. The company’s advanced 3nm and 5nm chip technologies now contribute over 60% of total wafer sales. Improved cost management pushed gross margins up by 380 basis points to 59.9%.

TSMC Price, Consensus, and EPS Surprise

Driven by robust demand for its advanced chips, TSMC expects revenue growth to continue in 2026. The company projects a roughly 30% increase in revenue, with the Zacks Consensus Estimate for 2026 at $158.2 billion, representing a 29.2% year-over-year rise.

AI Expansion Strengthens TSMC’s Market Position

TSMC maintains its leadership in the global chip foundry sector, making it the preferred partner for companies advancing AI technology. Industry leaders such as NVIDIA, AMD, and Broadcom rely on TSMC for manufacturing high-performance GPUs and AI accelerators.

AI-related chip sales have become a key growth driver. In 2025, high-performance computing, which includes AI revenues, accounted for 58% of TSMC’s total revenue—up from 51% in 2024. The company expects AI revenue to grow at a compound annual rate exceeding 50% from 2024 to 2029, cementing TSMC’s role at the heart of the AI supply chain.

To meet rising demand, TSMC plans to invest between $52 billion and $56 billion in capital expenditures for 2026, a substantial increase from $40.9 billion in 2025. These investments focus on advancing manufacturing processes to maintain TSMC’s competitive edge.

Attractive Valuation Supports TSMC Investment

Despite its impressive rally, TSMC’s stock remains attractively valued. The company trades at a forward 12-month price-to-earnings (P/E) ratio of 23.46, below the sector average of 24.60, making it appealing for long-term investors.

TSMC Forward 12-Month P/E Multiple

Source: Zacks Investment Research

Compared to other major semiconductor companies, TSMC’s P/E ratio is lower than Broadcom (29.15) and AMD (28.02), but slightly higher than NVIDIA (22.98).

Conclusion: TSMC Remains a Top Pick

TSMC continues to be a foundational player in the semiconductor industry. Its expertise in advanced chip manufacturing, strong presence in the AI sector, and ongoing capacity expansion position it for sustained growth. Considering its valuation and growth trajectory, now is an opportune time to invest in TSMC.

The company currently holds a Zacks Rank #1 (Strong Buy).