To The Moon

A Financial Powerhouse Amidst Global Challenges

Imagine a company that not only weathers the storm but thrives in it. That’s TSMC for you. Their first-quarter 2024 results are nothing short of impressive. Yes, there was a 5.3% dip in revenue in NT dollars (3.8% in USD), but that’s merely the ebb and flow of the smartphone market. What truly stands out is TSMC’s net profit margin of 38.0%. It’s like having a sturdy umbrella in a drizzle – not just keeping dry but looking sharp too.

Innovation driving global tech and economic growth

Cash Flow: The Lifeblood of Innovation

One of the most exciting aspects of TSMC’s financials is their free cash flow, which surged by NT$30.34 billion to a whopping NT$255.01 billion in Q1 2024. This isn't just a number; it’s a testament to their operational prowess. With this cash flow, TSMC can invest in groundbreaking technologies, expand its global reach, and, crucially, keep shareholders grinning from ear to ear. After all, who doesn’t love a company that knows how to manage its money?

Valuation and Shareholder Delight

Now, let’s talk valuation. Some folks recently upped TSMC’s fair value estimate by 45% to TWD 1,380 per share (USD 213 per ADR). That’s driven by the high demand for AI, expected price hikes, and potential revenue upgrades. Even with a 60% surge in share price this year, $Taiwan Semiconductor Manufacturing(TSM)$ still seems like a hidden gem. The best part? This company manages to improve its free cash flow without demanding massive capital expenditure. Think of it as upgrading your car to a sleek electric model without spending a fortune on fuel.

Visualising TSMC’s stock performance: indicators align with investor sentiment

And what about shareholder dilution? It’s virtually non-existent here. TSMC’s diluted earnings per share (EPS) for Q1 2024 stood at NT$8.70, matching its basic EPS. This shows that share-based compensation and other dilutive instruments barely impact ownership stakes. It’s a clear sign that TSMC’s management is on the same page as its investors, ensuring growth without watering down shareholder value.

Leading the Charge in Advanced Technologies

TSMC is not just any semiconductor company; it’s at the forefront of advanced semiconductor manufacturing. Their 3nm and 5nm technologies are hot commodities, especially in the booming AI sector. Whether it’s powering the latest smartphones or turbocharging data centres, TSMC’s chips are in high demand. The rise of edge AI and the expansion of AI capabilities in data centres mean $Taiwan Semiconductor Manufacturing(TSM)$ is positioned perfectly for the future.

Moreover, TSMC is making strategic moves to fortify its position. New facilities in Arizona and Japan are reducing geopolitical risks and expanding their customer base. This diversification isn’t just smart; it’s essential in today’s volatile global market.

innovation amidst dynamic technological landscapes

Conclusion: Why TSMC is a Smart Bet

In summary, TSMC's strong financial performance, robust cash flow, minimal shareholder dilution, and leading edge in AI technology make it an enticing investment. Sure, there are challenges like rising electricity costs and potential margin pressures, but TSMC’s overall outlook for 2024 and beyond remains bullish. Investing in $Taiwan Semiconductor Manufacturing(TSM)$ is like betting on the house in a casino – the odds are ever in your favour.

@TigerStars @Daily_Discussion @Tiger_comments @Tiger_SG @Tiger_Earnings @TigerClub @CaptainTiger @MillionaireTiger @TigerWire