Taiwan Semiconductor MFG. (TSM)

Backbone of chip and AI industry. Commands about 70% of global market share. Very strong forecast of ~30% earnings growth. Leadership in the 3-nanometer production space, and progressing towards 2 nanometers (just mind-blowing). That will really sustain partnerships with customers. 

Very strong structural demand for chip uses across industries, leading to long-term secular growth. Additional fabrication plants built around the globe enhances supply-chain security. Yield is 1.35%.

It is the leader in the space with about 38% of semis. The semi space is very cyclical - the demand goes way up and then starts to dry up with big inventories. It is therefore not a long term hold. 

Really benefited with the data centre buildout and AI investment. She doesn't typically invest in the semi space, as it's very cyclical. But now it's viewed as a growth sector. Valuations in the sector are quite high, not sure how long growth is sustainable.

Enables all the other companies to do what they do. Monopoly on leading-edge fabrication of chips. Margins are high. Today announced price increases. Very high ROIC. Cheap valuation of 17x PE (half that of NVDA) for the growth ahead. If you believe that AI is even modestly real, there's no debate that this name will have a role to play for many years. 

Why take the risk with an INTC, who's betting that it can leapfrog into success? TSM is already there. His anchor position in technology. Yield is 1.09%.

Not sure where it's going to go in the short term. This name is probably #1 in its industry, controlling ~2/3 of chip production. Good, solid company in a leadership position in a leadership sector.

Stock's come up on the back of growth plus multiple expansion. Now trading around mid-20x PE. Rich for him, he'd look for a pullback. If you buy now, significantly more valuation risk. He hasn't been selling, but not buying anew either. Numbers tomorrow will likely be quite strong. Releases data monthly, so there are fewer surprises.

Typically, he doesn't buy into a release. But in this case, the last monthly release was quite strong, and demand is the same. So numbers are likely to be strong. However, it also gets into what was the market expecting? If the market was expecting 35% growth, but it comes in at "only" 30%, will the stock sell off? So directionally he expects quite strong topline growth, but will that satisfy the market?

Performed very well, up 62% in last 12 months. Very important part of the AI infrastructure space. Expected 25% earnings growth rate, at only 29x forward PE. Only bad thing about it is that he doesn't own it :(  Likes it, but there needs to be a sizable pullback. Need to be aware of its geographic and regulatory issues.

In the top 10 (if not the top 5) in his fund. Already surpassed average analyst price target. With current market momentum, he's not selling, but is writing calls. Biggest foundry in the world, you have to stick with it.

Think of this name as the unsung hero of the AI conversation. NVDA gets the credit, but TSM does the hard work of making these chips at the atomic layer. The very last AI stock he'd sell. It's also the cheapest, with the most latent pricing power. Will benefit from deepening of semiconductor technology in our day-to-day lives, including in AI data centres.

Not a screaming bargain at these levels. A hold, but still decent returns ahead.

Even though it has geo-political vulnerability he doesn't think geo-political issues will be an issue over the next one to three years. Although they are a dominant player, whether they continue making chips for the US with its on-shoring push remains to be seen. There is no real incentive for foreign companies to build their businesses in the US.

Ranks well in its space, but it's a wait-and-see. Controls about 35-38% of the foundry business. He's watching it. His associate, Julien Nono-Womdin, spoke extensively about this name on this past Monday's Market Call. 

It has had competition over the decade but has had a strong presence and leading edge. It is in an enviable position. Tariffs on semi-conductors would slow the US economy and US markets. It has no reason to turn negative.

Price target is $275, not that far away. Instead of price targets, he's recently started to use mental (not hardwired in) trailing stops for the mega-caps. His mental stop for this one is $230; if it goes below that, something pretty dramatic must be happening.

Is bearish the semis sector and has been reducing his exposure. The Trump tariffs are a serious risk. Him trying to move semis production into the US won't work at all in the long run.  Also, data centre spending has peaked and will slow. Valuations are high. That said, TSX is the number one semis manufacturer and remain a major player here. Also, the geopolitical risks to Taiwan are not good.

Is the most important company in the world. It has a 70% market share in making chips for others (but not designing its own chips). They work with Nvidia, Apple and al the big players. Anything is possible, including China invading Taiwan, but China buys 11% of its chips from TSM. The US will do all it can to protext TSM. Earnings are growing at an incredible rate, yet is safer than Nividia. Trades at only 20x PE with a good balance sheet and margins.