Taiwan Semiconductor MFG. (TSM)

Many feel this is am Nvidia proxy, that if NVDA is strong, TSM flies. But this hasn't been true in the last couple quarters. Listen to their call only to get a sense on the semis space.

His choice in the space. It makes the chips for NVDA and a whole slew of others. It's more diversified. Valuation is cheaper. Much clearer growth path going forward over next few years.

NVDA has fallen, but it's not a cheap stock. Factored into the share price is a huge growth expectation. Just because share price has fallen on a high flyer, that doesn't necessarily make it cheap.

Undisputed leader in leading-edge foundries, and it's been that way for several years. Has anything changed? Now branching out to the US, which gives geographic diversification. This may be costly, but it has pricing power. 

Another reason it's done well is because competitors have done poorly. But INTC is getting its act together, and Samsung will at some point. Down the road (and it may be a long road), there will be some additional competition. But TSM will still be the leader. A staple in most growth portfolios.

Core holding in his global portfolio. Eaten INTC's lunch. Believes there's at least double-digit (10%) annualized upside over the next 5 years. Earnings will jump significantly this year with Arizona plant coming on stream. Growth over the next 2-3 years will be in the 15-20% annualized range.

Companies like NVDA must use TWM.

Didn't they say a few years ago they would build a plant in the U.S., but permitting, labour and other factors would make it costs 6x more. Trump is kidding himself that the most strategic Taiwanese company will move their IP of strategic importance to the US. Think about it. A great company and major beneficiary of AI. ETFs drive the valuation. 

Checks all the boxes for his firm: big insider ownership, beautiful balance sheet, high FCF, high ROIC, decent valuation, gigantic moat. No one can do what it does. Overhang: what if someday China invades Taiwan? It would be bad not only for TSM, but also every AI-type company. Guiding for 20% compound growth over next 5 years.

His firm has always stayed away from semis, as they're very cyclical and easily disrupted (though this name seems more insulated). Capital intensive. He's on the fence, but feels overall that the better way to play AI is to own the Mag 7.

Shares will bounce and news will be good this week.

Undisputed leader of semiconductor foundries. 51-52% market share, which it will maintain due to its huge economies of scale that competitors can't match. Very deep pockets. A bit cyclical. Yield is 1.4%.

He remains bullish. Whatever semi chips are needed, TSM continues to make them. They are the leader here. It remains reasonably valued.

A strategic, long-term holding. In advanced chips, everything has to flow through TSM. 

A key beneficiary of AI capex and is the world's biggest chipmaker with dominant marketshare. Few can match their tech expertise, and their valuation remains reasonable.

All the Mag 7 capex spending announcements are great for TSM.

The leader. He took some profits. Though there are plants in the US, it's not going to move leading-edge production offshore from Taiwan. Recommends reading Chip War by Chris Miller.

Best of breed. A very good foundry. If you buy it, don't sell it, though you can trim it. Problem is, this has had a huge run. He last bought this a while ago at $15. If you're not bothered from the high PE, you can buy this. Has AI exposure.