TSM Should I Buy
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Based on the user's long-term investment preference, beginner knowledge level, and available capital, TSMC is a good buy. The company demonstrates strong financial growth, a dominant market position, and positive long-term prospects driven by AI demand. Despite minor short-term technical weaknesses, the stock aligns with the user's long-term goals.
The MACD is negatively expanding (-1.671), indicating bearish momentum. RSI is neutral at 33.671, and moving averages are converging, suggesting no clear trend. The stock is trading below the pivot level (338.134), with support levels at 328.487 and 322.527, indicating potential downside risk in the short term.
TSMC holds a 72% market share in the pure-play foundry market.
Strong financial performance in Q4 2025, with revenue up 25.52% YoY and net income up 40.66% YoY.
Analysts have raised price targets, with a consensus bullish outlook and a focus on AI-driven growth.
Increased capital expenditure plans for 2026 to meet rising AI chip demand.
Institutional investors reduced holdings by 2.8% in Q4 2025, reflecting trade concerns and profit-taking.
Short-term technical indicators suggest bearish momentum.
Options market sentiment is bearish, with high put-call ratios.
In Q4 2025, TSMC reported revenue growth of 25.52% YoY to $33.71 billion, net income growth of 40.66% YoY to $16.30 billion, and EPS growth of 40% YoY to $0.63. Gross margin increased to 62.32%, reflecting operational efficiency.
Analysts are overwhelmingly bullish on TSMC. DA Davidson initiated coverage with a Buy rating and a $450 price target, citing a durable competitive advantage. Barclays and TD Cowen raised their price targets to $450 and $370, respectively, following strong Q4 results. Goldman Sachs sees a multi-year growth engine in AI, raising its price target to NT$2,330.
