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Yahoo
31 minutes ago
- Business
- Yahoo
TSMC Stock Maintains High-Conviction AI Play Status With $220 Price Target
Taiwan Semiconductor Manufacturing Company (TSM), or TSMC for short, the world's numero uno pure-play semiconductor foundry, has surged nearly 20% over the past month. Despite this impressive rally, my outlook remains bullish. Easily unpack a company's performance with TipRanks' new KPI Data for smart investment decisions Receive undervalued, market resilient stocks right to your inbox with TipRanks' Smart Value Newsletter The company is well-positioned to benefit from powerful tailwinds, including relentless AI-driven demand, a dominant—nearly monopolistic—position in advanced chip manufacturing, ongoing geographic diversification, and a steady cadence of technological breakthroughs. TSMC continues to be the principal manufacturer and primary supplier of chips for leading AI powerhouses, including Nvidia (NVDA), Advanced Micro Devices (AMD), Apple (AAPL), and Qualcomm (QCOM). Notably, TSM is also the producer of Nvidia's cutting-edge Blackwell chip series, which has recently gained immense popularity. TSMC's 3nm process currently represents the most advanced semiconductor technology in the industry, delivering superior power efficiency and performance. Looking ahead, anticipation is building around the company's upcoming 2nm and 1.6nm nodes, scheduled for launch in late 2025 and 2026, respectively. The 2nm technology, referred to as N2, remains on track for volume production in the second half of 2025. This next-generation process is expected to deliver a 10–15% improvement in processing speed at the same power consumption, or a 20–30% reduction in power usage at equivalent performance. Following that, the 1.6nm process is projected to further improve power efficiency by an additional 15–20% over the 2nm node. These advancements are especially timely, as data centers grapple with rising energy costs. The shift to more power-efficient chips is becoming not only a technological imperative but also an economic necessity. This positions TSMC as a key enabler in the ongoing global semiconductor upgrade cycle. Reflecting this momentum, TSMC has outlined strong long-term growth expectations. The company projects its AI-related chip revenue to grow at a compound annual growth rate (CAGR) of 45% over the next five years, while overall revenue is forecast to grow at a 20% CAGR during the same period. These figures underscore the company's pivotal role in powering the future of computing. Such growth potential hasn't gone unnoticed. Famous investor Cathie Wood's Ark funds recently purchased 241,047 shares of Taiwan Semiconductor, worth $46.3 million, signaling firm institutional conviction. TSM commands an overwhelming 64.9% global market share in the foundry segment, dwarfing its closest competitors— Samsung Electronics (SMSN) and Intel (INTC), according to Statista. Its unparalleled scale, deep client relationships, and technological edge create formidable barriers to entry. This dominant position grants TSM significant pricing power. Clients, many of whom have relied on TSM for decades, are unlikely to switch suppliers given the risk of falling behind in the rapidly evolving AI race. One of the major risk factors associated with TSM is its geographical location in Taiwan, which poses the risk of a takeover by China. However, TSM is prioritizing geographic diversification as a core strategic initiative, proactively addressing these risks by diversifying its global manufacturing footprint. In addition to its $65 billion investment in U.S.-based fabs, TSM has committed a further $100 billion to expand capacity globally. Its Arizona facility is reportedly operating at full capacity through 2027, highlighting robust demand. This geographic diversification not only reduces exposure to potential tariffs but also strengthens TSM's resilience to geopolitical volatility. Beyond the U.S., TSM is also establishing a new chip design center in Munich, Germany, as well as a manufacturing plant in Dresden, Germany, and new fabs in Japan. Taiwan Semiconductor's strategic investments beyond its home base reflect prudent risk management and reinforce its strategic shift toward a more balanced global presence. TSM is set to report its Q2 2025 earnings on July 17. The company is projected to report earnings per share (EPS) of $2.30, representing a 57.5% year-over-year increase. Additionally, Q2 revenues are projected to increase by 13% year-over-year, ranging between $28.4 billion and $29.2 billion, driven by high demand for its advanced 3-nanometer (nm) and 5-nm processes. On May 9, TSM unveiled impressive revenue figures for April 2025, marking the highest ever figure in any single month in the company's history. April net revenues galloped 48.1% year-over-year to 349.6 billion New Taiwan dollars (approximately $11.6 billion). It's worth noting that TSM anticipates 24% to 26% sales growth for FY2025, driven by strong demand for its latest nanochips amid the AI surge. Importantly, TSM trades at an attractive valuation compared to its peers. In terms of its valuation, TSM looks cheap. Currently, it's trading at an attractive forward P/E ratio of 21x, compared to much higher multiples of its peer group. Semiconductor company Advanced Micro Devices is trading at a higher forward P/E multiple (28x), while the AI prodigy Nvidia is trading at a forward P/E of 32x. On Wall Street, TSM stock carries a Strong Buy consensus rating based on seven Buy, one Hold, and zero Sell ratings over the past three months. TSM's average stock price target of $219.43 implies approximately 11% upside potential over the next twelve months. The semiconductor industry continues to experience strong growth, driven largely by the rapid adoption of artificial intelligence technologies. TSMC, with its unmatched manufacturing capabilities, deeply embedded customer relationships, and advanced technology roadmap, is exceptionally well-positioned to capitalize on this transformative trend. The company's timely investments in next-generation nodes—specifically 2nm and 1.6nm—alongside its global manufacturing expansion, align well with rising demand fueled by a broad upgrade cycle across the tech landscape. These factors collectively make TSMC a compelling long-term investment opportunity. With a favorable valuation and strong earnings momentum, the current environment presents an attractive entry point for investors looking to gain exposure to the accelerating AI megatrend. 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Business Insider
an hour ago
- Business
- Business Insider
Stifel Nicolaus upgrades Meridian Mining SE (MNO) to a Buy
Meridian Mining SE (MNO – Research Report) received a Buy rating and price target from Stifel Nicolaus analyst Cole McGill yesterday. Confident Investing Starts Here: Easily unpack a company's performance with TipRanks' new KPI Data for smart investment decisions Receive undervalued, market resilient stocks right to your inbox with TipRanks' Smart Value Newsletter According to TipRanks, McGill is an analyst with an average return of -16.1% and a 29.05% success rate. McGill covers the Basic Materials sector, focusing on stocks such as Foran Mining, Montage Gold Corp., and Silver Tiger Metals. The word on The Street in general, suggests a Hold analyst consensus rating for Meridian Mining SE.
Business Insider
an hour ago
- Business
- Business Insider
Canaccord Genuity Reaffirms Their Hold Rating on BRP (DOOO)
In a report released yesterday, Luke Hannan from Canaccord Genuity maintained a Hold rating on BRP (DOOO – Research Report), with a price target of C$60.00. Confident Investing Starts Here: Easily unpack a company's performance with TipRanks' new KPI Data for smart investment decisions Receive undervalued, market resilient stocks right to your inbox with TipRanks' Smart Value Newsletter According to TipRanks, Hannan is a 4-star analyst with an average return of 10.5% and a 45.67% success rate. Hannan covers the Consumer Cyclical sector, focusing on stocks such as BRP, AutoCanada, and Spin Master. In addition to Canaccord Genuity, BRP also received a Hold from Citi's James Hardiman in a report issued yesterday. However, on the same day, Stifel Nicolaus upgraded BRP (NASDAQ: DOOO) to a Buy. Based on BRP's latest earnings release for the quarter ending January 31, the company reported a quarterly revenue of $2.1 billion and a GAAP net loss of $219.2 million. In comparison, last year the company earned a revenue of $2.69 billion and had a net profit of $188.5 million
Business Insider
an hour ago
- Business
- Business Insider
Macquarie Sticks to Their Hold Rating for Medibank Private (MDBPF)
In a report released today, Andrew Buncombe from Macquarie maintained a Hold rating on Medibank Private (MDBPF – Research Report), with a price target of A$4.25. Confident Investing Starts Here: Easily unpack a company's performance with TipRanks' new KPI Data for smart investment decisions Receive undervalued, market resilient stocks right to your inbox with TipRanks' Smart Value Newsletter Buncombe covers the Financial sector, focusing on stocks such as Insurance Australia Group Limited, ASX , and NIB Holdings Ltd. According to TipRanks, Buncombe has an average return of 11.6% and a 78.43% success rate on recommended stocks. Currently, the analyst consensus on Medibank Private is a Moderate Buy with an average price target of $3.04.
Yahoo
an hour ago
- Business
- Yahoo
Reddit's (RDDT) Rollercoaster Ride Enters Buy-the-Dip Territory
Reddit Inc. (RDDT) stock has been on a wild ride since its IPO last March, soaring from $34 to a dizzying $230 before pulling back at $103 today. The bullish moment has been fueled by Reddit's jaw-dropping growth, tempered by whispers of doubt about whether it can keep the momentum going. I'm betting it can. With its unique platform and skyrocketing metrics in both the top and bottom lines, I see Reddit's dip as a rare chance to buy into a social media giant poised for a big rebound. Easily unpack a company's performance with TipRanks' new KPI Data for smart investment decisions Receive undervalued, market resilient stocks right to your inbox with TipRanks' Smart Value Newsletter Reddit's strength lies in its vibrant, sticky community. In Q1, daily active users (DAUs) on the platform hit 108.1 million, a 31% year-over-year increase, while weekly users totaled 401 million. Millions of people are now exploring all kinds of subreddits for everything from niche hobbies to breaking news. I would argue that, along with X, Reddit is one of the best places to go to feel the pulse of what the 'conversation' is for any given topic. In the meantime, Reddit's 'Reddit Answers' feature, now at 1 million weekly users, has made it easier for people to find solutions, boosting engagement and keeping users hooked longer. This should prove to be a strong short to medium-term catalyst for Reddit to sustain sticky user metrics. And this stickiness translates into real staying power. The platform's ability to connect users over hyper-specific interests creates a network effect that's hard to replicate. As more users join, the content becomes richer, attracting even more people. It's a virtuous cycle that drives growth and makes it a magnet for advertisers seeking to tap into passionate, engaged audiences. Speaking of Reddit's advertising business, it is firing on all cylinders, with Q1 ad revenue soaring 61% to $359 million. I really like how Reddit's ads are sneaky but effective. You're deep in a thread about camping gear, and suddenly there's a sponsored post for a tent that fits the conversation perfectly. That's a superb delivery system that has advertisers lining up. Notably, over 50% more advertisers joined the platform year-over-year, indicating that brands view Reddit as a valuable channel for delivering high return on ad spend (ROAS). Reddit's data has emerged as a highly valuable asset, and the company is beginning to effectively monetize it. In the last quarter, revenue from data licensing and related sources rose by 66% to $34 million. This growth is largely driven by the increasing demand for high-quality, user-generated content to train artificial intelligence models. Reddit's extensive and diverse dataset, covering a wide range of topics, makes it particularly well-suited for this purpose. Additionally, Reddit's partnership with Google (GOOGL), aimed at enhancing the platform's visibility in search results, has significantly increased its online presence. As a result, Reddit content is now more prominently featured in searches ranging from consumer advice to home repair solutions. Looking ahead, this revenue stream is likely to become a more significant part of Reddit's overall business. As AI technologies continue to evolve, the value of Reddit's comprehensive dataset is expected to grow. The interest shown by companies like Google underscores just how compelling and insightful this data can be—it provides a unique window into the breadth of human curiosity and conversation. Following a significant decline from its $230 peak, the stock now trades at approximately 11x sales and 81x earnings per share (EPS), based on 2025 consensus estimates. While these valuation multiples may appear elevated, they are more justifiable than they seem. Reddit's revenue is expected to grow by 42% this year, reaching record levels as the company anticipates its first profitable year. Moreover, analysts forecast an 83% increase in EPS for fiscal year 2026—from $1.24 in FY2025—highlighting Reddit's rapid scaling and improving profit margins. Following the stock's extended sell-off, Wall Street now seems rather optimistic about Reddit. RDDT stock features a Moderate Buy consensus rating, with 12 analysts currently bullish, eight neutral, and just one bearish. Reddit's average stock price target of $149.35 indicates a significant upside potential of almost 37% over the coming twelve months. Reddit's evolution from a grassroots online forum to a publicly traded company with a $19 billion market capitalization is truly impressive. The recent pullback to $103 appears to be more of a temporary pause than a long-term setback. Backed by strong user growth, a robust advertising business, and an increasingly valuable data licensing segment, Reddit is positioning itself for long-term success. My positive outlook is rooted in the fact that this is more than just a traditional social media investment, though that's a space I continue to believe in, as reflected in my conviction in Meta Platforms (META). Reddit represents a broader opportunity centered on community engagement, data monetization, and platform innovation. In my view, the current dip presents a compelling entry point ahead of what could be the company's next phase of growth. Disclaimer & DisclosureReport an Issue Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
