IBD: Nvidia Partner Taiwan Semi Powers Toward Buy Point Amid Tariff Threat

Dow Jones12-10

By Vidya Ramakrishnan

There are thousands of stocks to buy and watch. But the IBD's stock screener can sift through those to pick top stocks. Four stocks stand out in the Global Leaders screen.

Taiwan Semiconductor has a spot on the screen as it forms a base with a buy point of 212.60.

The Global Leaders list on IBD's stock screener also shows IPO Leader and hotel operator Atour Lifestyle Holdings, energy stock Vista Energy and building products maker Trane Technologies.

Taiwan Semi gapped up after a strong third quarter report on Oct. 17. Sales grew 41% to $23.9 billion while earnings of $1.97 per share increased 57% from the year-ago period.

For the current quarter, the maker of Nvidia-designed chips gave a midpoint sales forecast of $26.5 billion, breezing past Wall Street's estimates of $24.9 billion. Taiwan Semiconductor noted that it saw strong AI-related demand during the quarter.

After earnings were announced, Needham analysts noted that the company had delivered a "blowout" quarter and gave the stock a price target of 210 with a buy rating.

See The Latest Updates To IBD Watchlists

Taiwan Semiconductor also supplies chips to top Magnificent Seven companies such as Apple as well as chip megacaps like Advanced Micro Devices, Broadcom and Qualcomm.

On Thursday, news that Taiwan Semi may start making its advanced chips for Nvidia's Blackwell system in Arizona to avoid potential tariffs by the Trump administration boded well for TSMC.

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According to IBD Stock Checkup, the contract chip manufacturer ranks first among other chip manufacturing stocks and holds a Composite Rating of 96 and EPS Rating of 98. TSM stock has also left behind over 90% of other stocks in price performance over the past 52 weeks: It holds a Relative Strength Rating of 91.

CHINA STOCK BREAKS OUT ON STIMULUS PLAN

Atour Lifestyle is breaking out at a buy point of 29.15, according to IBD MarketSurge. The company boasts steady sales and earnings growth over the seven most recent quarters. The stock has an exceptional EPS Rating of 99, while its Composite Rating of 97 is also impressive. The Relative Strength stands at 91.

An added bonus is that the relative strength line is at a new high as shares break out.

On Monday, news that China's top decision-making body, the Politburo, is planning on a "moderately loose" monetary policy sparked Chinese stocks, including Atour. The company describes itself as an "upper midscale hotel chain in China" with over 1,500 hotels.

ENERGY STOCK AT ALL-TIME HIGH

Vista Energy is hitting an all-time high after breaking out on a good earnings report Oct. 25. Third quarter sales grew 53% to $462.4 million year over year, while earnings per share of $1.66 rose 102% from the prior year. Vista is an oil and gas exploration and production company with most operations in Argentina.

Earnings growth has been strong in the past two quarters and has helped the stock score an ideal EPS Rating of 99. The Composite Rating stands at 91; the Relative Strength Rating is 89.

Lastly, Ireland-based Trane Technologies is testing support at the 50-day moving average and is just below its all-time high of 422, which is also a possible buy point in a three-weeks-tight pattern. The stock, however, has already about doubled since it rose to new highs in November 2023.

Sales and earnings growth has been steady over the past eight quarters. Third-quarter sales grew 11% to $5.4 billion while earnings increased 21% to $3.37 per share. The company makes heating and air conditioning equipment, thermal pumps, chillers and other products. The stock boasts outstanding EPS and Composite Ratings of 96. The Relative Strength Rating is 88.

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December 10, 2024 08:00 ET (13:00 GMT)

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IBD: Nvidia Partner Taiwan Semi Powers Toward Buy Point Amid Tariff Threat

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