Taiwan Semiconductor Manufacturing is the IBD Stock Of The Day as the world's leading contract chipmaker continues to benefit as the go-to provider of cutting-edge chips for artificial intelligence and other applications. Meanwhile, TSM stock is in a buy zone.
While industry peer Intel and others struggle to make chips at advanced nodes with the tiniest possible circuits, Taiwan Semiconductor has perfected the process. That's why customers like Nvidia, AMD, Apple and Broadcom have flocked to its factories.
Nvidia Chief Executive Jensen Huang praised Taiwan Semiconductor, better known as TSMC, at the Goldman Sachs Communacopia & Technology Conference on Sept. 11.
"We're fabbing at a TSMC because it's the world's best. And it's the world's best not by a small margin. It's the world's best by just incredible margin," Huang said.
TSM Stock Is Recent Breakout
On the stock market today, TSM stock rose 4.1% to close at 181.97.
On Thursday, TSM stock broke out of a cup-with-handle base at a buy point of 175.45, according to IBD MarketSurge charts. The 5% buy zone extends to 184.22, based on IBD trading principles.
Taiwan Semiconductor has posted two straight quarters of accelerating sales and earnings growth. It will report its third-quarter results in mid-October. That could be a catalyst for TSM stock.
Analysts polled by FactSet expect TSMC to earn $1.77 per U.S. share on sales of $23.03 billion in the September quarter. That would translate to year-over-year growth of 40% in earnings and 36% in revenue. It also would mark its third straight quarter of accelerating growth in both metrics.
TSM stock ranks first out of 32 stocks in IBD's semiconductor manufacturing industry group, according to IBD Stock Checkup. It has an IBD Composite Rating of 92 out of 99. IBD's Composite Rating combines five separate proprietary ratings into one easy-to-use rating. The best growth stocks have a Composite Rating of 90 or better.
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