This Unstoppable Artificial Intelligence (AI) Stock Climbed 90% in 2024, and It's Still a Buy at Today's Price

Core Viewpoint - TSMC is positioned as a strong investment opportunity in the AI sector, potentially outperforming major chip designers like Nvidia and Broadcom due to its advanced technology and market share [1][2]. Company Performance - TSMC reported a 39% year-over-year revenue increase and a 57% rise in earnings per share for the fourth quarter, driven by a gross profit margin of 59% [4]. - The company has expanded its market share in 2024, benefiting from high demand for advanced AI chips [6]. Technological Advantage - TSMC is recognized for its cutting-edge technology, with Nvidia's CEO stating it is "the world's best by an incredible margin," leading to over 60% of all chip manufacturing spending being directed to TSMC [5]. Capital Expenditures and Growth Outlook - TSMC plans to significantly increase capital expenditures in 2025, budgeting between $38 billion and$42 billion, up from $29.8 billion in 2024 [7]. - The company anticipates a long-term revenue growth outlook of 20% per year for the next five years, with AI-related demand expected to double in 2025 [8]. Stock Valuation - TSMC's stock trades for less than 25 times analysts' 2025 earnings estimates, indicating a favorable valuation for a company with strong earnings growth potential [11]. - Despite potential risks, TSMC's stock is viewed as a bargain at less than 20 times forward earnings [14].