Taiwan Semiconductor MFG. (TSM)

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. 

It is one of the largest players in the semi-conductor space. You can think of it as the engine for the AI smartphone. It is fundamentally very strong and analysts still see 15% upside. It is trying to consolidate so wait for an entry point. You could take profits if owned.

New addition to his firm's dividend growers mandate. Payout ratio about 35%. Expects earnings and dividends to grow 20% over coming 3 years. Trades at only 17.5x PE. Great combination of value and growth.

Industry leader by far. Sustainable competitive advantage. Clear technological leadership. Outstanding manufacturing capabilities. Scale advantages to decrease unit cost and increase margins. Crucial partnerships with some of world's biggest companies. Secular winner from demand for high-performance chips. Yield is 1.43%.

You can see the difficulty with taking news bites, such as on tariffs, and trying to formulate an investment opinion. They can change so quickly. 

On his shortlist. One of the biggest chip companies in the world. 21-22% growth rate forecast, but the price is overbought. Wants to see it come down a bit, to low $200s if it can. Also likes how it's more global and less US-centric.

Likes its economic moat and insulation from cyclicality in the industry.

His preference in the space. Leading manufacturer, so over time everything flows through them. Essential company in global economy. Because of the threat of Chinese takeover, will always trade at reasonable valuation. Now ~15x PE. Diversifying manufacturing footprint across mature markets in US and Europe.

Great example of a direct AI beneficiary. World's leading foundry business -- they make all the chips for everyone. Completely dominant via size, scale, and expertise. Though spending billions on building fabs, it extends competitive advantage because no one can compete.

One of the few stocks you can still get at inexpensive valuations, due to Taiwan invasion risk. Concern is not going away, but it's not near term. Smart to offer Trump additional investment, but to be vague on the timeline. Strong demand for US production, but it will come at higher costs of production.

Takes about 10 years to build a foundry, and you need access to water. So there goes Texas, Arizona, etc. In Japan, a foundry was rejected because they didn't want to divert water that's needed to grow food. Overhang of geopolitical risk of China invading Taiwan. Only 10% of foundries are in the US.

Great products. Leader. Alternative in Europe is ASML, which he owns. He wouldn't own both. No problems with TSM, but you have to understand geopolitical and cost risks.