In the exclusive club of trillion-dollar companies, only a select few have managed to reach this milestone. The “Magnificent Seven” tech giants, along with Berkshire Hathaway, have achieved this feat. However, there’s one company that’s often overlooked despite being a crucial player in the artificial intelligence (AI) revolution. Taiwan Semiconductor Manufacturing (TSM) is the unsung hero behind the scenes, providing cutting-edge semiconductors to industry leaders like Nvidia.
The AI boom has led to an unprecedented surge in spending, with companies shelling out an estimated $200 billion annually. This number is expected to skyrocket to over $600 billion by 2028. TSM is poised to benefit greatly from this trend, as its advanced semiconductors are in high demand. In fact, the company is currently the only manufacturer of 3-nanometer semiconductors, giving it a significant technological advantage.
TSM’s revenue has been growing steadily, with its high-performance computing segment experiencing a remarkable 28% quarter-over-quarter growth. The company’s operating income has also seen a substantial increase of 277% over the past decade, reaching $32 billion. This impressive earnings growth is a key driver of market capitalization gains and stock price appreciation.
With a reasonable price-to-earnings ratio of 32.6, TSM is far from being a bubble stock. Its dominant position in the foundry manufacturing market, with an estimated 60% market share, ensures a steady stream of revenue. As long as TSM maintains its technological edge, its operating earnings will continue to grow.
Currently, TSM’s market capitalization stands at $968 billion, just shy of the trillion-dollar mark. As its earnings continue to rise, it’s likely that the company will soon join the elite group of trillion-dollar companies. With its strong fundamentals and growing demand for AI, TSM is an attractive investment opportunity for those looking to capitalize on the AI revolution.
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