Missed Out on Nvidia? Buy Taiwan Semiconductor Manufacturing Instead

Group 1: Investment Opportunity - Taiwan Semiconductor Manufacturing (TSMC) is positioned as a strong investment alternative to Nvidia, benefiting from the same AI-driven market trends while being more diversified [1] - TSMC is the world's largest contract chip manufacturer, continuously innovating and adapting its technology to maintain a competitive edge [2] Group 2: Technological Advancements - TSMC's recent introduction of 3nm chips has already contributed 9% to its revenue in Q3 2024, despite only starting production in Q3 2023 [2] - The company is already developing 2nm chips, expected to launch in 2025, with demand for these chips reportedly exceeding that of previous generations [3] Group 3: Revenue Growth Projections - TSMC anticipates a 50% compounded annual growth rate in AI-related chip revenue over the next five years, which could account for over 20% of its total revenue [3] - Apple has been a significant customer for TSMC, contributing 25% of total revenue in 2023, and the launch of new features is expected to drive an upgrade cycle benefiting TSMC [4] Group 4: Valuation and Earnings - TSMC's stock valuation has increased, trading at 15 times forward earnings entering 2024, but remains more attractive compared to Nvidia's 47 times forward earnings [5][6] - Analysts project a 22% increase in earnings per share (EPS) for 2024 and 26% for 2025, indicating that TSMC's growth will support its valuation [6]