Today’s Headline

Wealth Manager Believes Taiwan Semiconductor (TSM) is ‘Very Undervalued’ – Here’s Why

When I first heard a seasoned wealth manager say that Taiwan Semiconductor (TSM) is "very undervalued," my ears perked up. As someone who’s always on the lookout for long-term investment opportunities, I couldn’t help but dig deeper. TSM is one of those companies that doesn’t always make flashy headlines, but plays a massive role in the world behind the scenes. And right now, the market might just be sleeping on it.

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Why TSM Matters More Than Most People Think

TSM is the world's largest dedicated semiconductor foundry. That means it manufactures chips for other companies—like Apple, NVIDIA, AMD, and even Intel. If you’re using a smartphone or computer, chances are it has a chip made by TSM.

In today’s digital world, semiconductors are the heart of everything—from artificial intelligence and electric cars to 5G and cloud computing. TSM isn’t just important; it’s essential. And the demand for chips isn’t going anywhere.

What Makes It "Very Undervalued"

So what does "undervalued" really mean here? According to the wealth manager I spoke with, it comes down to three things:

• Strong fundamentals: TSM’s earnings are solid. Their profit margins are healthy. And their balance sheet is strong with low debt.

• Consistent demand: There’s no shortage of customers. In fact, many big tech firms rely heavily on TSM.

• Current stock price vs. potential: Based on its earnings, cash flow, and future growth, the current stock price doesn’t reflect the full value of the business.

In other words, the market is undervaluing a company that is absolutely critical to the tech world.

Recent Headwinds That Pressured the Stock

So why is TSM trading at what some believe is a discount?

Well, like many tech stocks, it faced pressure from:

• Global economic fears

• Rising interest rates

• Geopolitical tensions between China and Taiwan

All of these factors made investors nervous. But sometimes, short-term fears can create long-term opportunities. That’s what the wealth manager believes is happening with TSM.

Geopolitical Risks Are Real, But Overblown?

It’s true: Taiwan’s location near China makes some investors nervous. There’s talk about what might happen if tensions escalate. But the reality is, TSM is so crucial to the global tech supply chain that most analysts believe neither side can afford major disruptions.

Plus, TSM has already begun diversifying manufacturing to countries like the U.S. and Japan to reduce risk. They’re not sitting still.

A Look at the Numbers

Let’s break it down. As of now:

• TSM has a price-to-earnings (P/E) ratio lower than many of its peers

• It has over 50% gross margins, which is excellent

• It spends heavily on R&D to stay ahead of competitors

Yet despite these strengths, the stock still trades at what looks like a bargain price. When a company has strong cash flow, steady demand, and a competitive edge—yet isn’t priced accordingly—it often means opportunity.

AI Is the Future, and TSM Is at the Center

We keep hearing about AI revolutionizing everything. Well, guess what? Those AI chips have to be made somewhere. And TSM is a key manufacturer.

Companies like NVIDIA and AMD design the chips—but they trust TSM to build them. As AI continues to expand, so will the demand for high-performance chips. That spells long-term growth for TSM.

A Dividend Too?

One thing that caught my attention: TSM pays a dividend. It’s not huge, but it’s steady—and growing. That’s a nice bonus for long-term investors who want some passive income while they wait for the stock to appreciate.

Insider Buying and Institutional Confidence

Another good sign: big investment firms are still holding on. In fact, some have even increased their positions. That’s often a sign that smart money sees future upside.

Also, TSM’s leadership has been buying shares—something they wouldn’t do if they thought the company was in trouble.

Timing the Market vs. Time in the Market

The wealth manager reminded me of an important principle: it’s not about timing the market perfectly—it’s about spending time in the market. If you believe in TSM’s long-term story, then buying when it’s undervalued can be a smart move.

Trying to wait for the perfect dip can mean missing out altogether.

What I’m Doing Personally

After researching more, I’ve decided to add TSM to my watchlist—and even buy a small position. It’s not about going all-in, but starting with a base investment and building over time.

If the stock drops? I’ll consider adding more. If it rises? I’ll feel good that I got in early.

Either way, I’m thinking long term.

Takeaway for You

If you’re reading this and wondering if TSM is worth your money, here’s what I’d say: do your homework. Look at the fundamentals. Understand the risks. But also don’t ignore the opportunity.

TSM is one of those rare companies that sits at the center of a growing global industry. And right now, it might be trading at a discount.

Final Takeaways

In investing, it’s easy to get caught up in fear. But some of the best decisions come when others are too afraid to act.

TSM might not be flashy. But it’s powerful. And according to at least one wealth manager—and now me—it could be one of the smartest stocks to own for the next decade.

Stay smart. Stay patient. And never stop learning.

[Live Life Grow Wealth]

DISCLAIMER

I make no representations, warranties, or guarantees, whether expressed or implied, that the content provided is accurate, complete, or up-to-date. Past performance is not indicative nor a guarantee of future returns.

I am an individual content creator and not regulated or licensed by the Monetary Authority of Singapore (MAS) as I do not provide investment services.

All forms of investments carry risks, including the risk of losing your entire invested amount. Such activities may not be suitable for everyone. You are strongly encouraged to seek advice from a professional financial advisor if you have any doubts or concerns.