Taiwan Semiconductor MFG. (TSM)

They've had a monster run. Nvidia would like more capacity from TSM, so TSM is in the position to raise prices. A great holding and not expensive.

In general, the semi space is quite expensive at this point. Look for opportunities, such as today with the NASDAQ coming down, to buy a bit cheaper.

They reported 30% sales growth YOY in May and 33% YOY in June and easily beat estimates. Shares jumped 3.54% today.

Makes NVDA's chips. Building massive plant in Arizona, got $$ from Biden administration. Great growth ahead, driven by AI chips. Building new capacity, which will be completely sold out over the next few years. Less upside and downside than NVDA, as they make chips for a diversified group.

Two completely different companies. NVDA is the creative genius leading the way in AI, whereas TSM makes the chips. 

Semiconductor space is quite cyclical, so earnings won't necessarily be going up every single year at a consistent clip. At mercy of overall economy. ROE averaged between 22-30% over last 15 years, very strong return profile. Risk is geopolitical, difficult to quantify. Berkshire, for example, has sold its position.

Stock's gone parabolic, cause for pause or reassessment. At 26x PE, not incredibly expensive. Look to add 20% below where it is right now.

Right at analysts' price target. Running at 100+%. NVDA is one of TSM's biggest clients, so reporting today should be interesting. Don't sell, but could write some calls around $159-160 and get a good premium from the volatility; keep track so you don't get traded out of your position.

Buy. Great numbers lately. Huge amount of orders. 

Largest chip manufacturer in the world. AI play, by far the leader in manufacturing. Several years ahead of competition. Looking at earnings growing by 50% over the next 2 years. Trades at 20x earnings, 15x next year's. Extremely cheap. Yield is 1.6%.

They report tomorrow. Doesn't expect surprises, because you can follow their monthly numbers and the company tells you often how they're doing. He's comfortable with it.

It reports next week. Earnings should be pretty good, because they have no spare capacity, but the market already expects this and it's reflected in the share price.

Bottleneck in packaging of new generation AI chips. Leading contract manufacturer for AAPL, NVDA, and AMD.  Weakness in smartphone area, but strength in AI applications. Should see AI growth for next 5 years. Then, potential for cyclical rebound on smartphone side. Not expensive. A few levers to pull for EPS upgrades throughout the year. Yield is 1.5%.

He holds a large position that's done well. His big concern is their exposure to China given fears of a Taiwan invasion; TSI has a lot of production in China. It's still reasonably price and can't keep up with orders. Shares will keep rising.

Up 53% in the past 12 months, but he prefers ASML and other companies that make semis production equipment, not the semis themselves. He likes TSM despite geopolitical risk. Everything comes through ASML.