$NVIDIA(NVDA)$ The big picture is that AI spending and demand are only increasing. As long as this trend remains in place, Nvidia's stock should continue to rise. Four years and counting, the bears are still at it.
135Target price? Hold on a second. Let's do some simple math. If total AI chip build-out grows at a 15% CAGR to 2030, then the TAM for $Taiwan Semiconductor Manufacturing(TSM)$ , $Intel(INTC)$ , Samsung, and Tesla (TerraFab) doubles to $500 billion by 2030. Intel Foundry will also support TerraFab, so we're talking a conservative 20% of that pie, or $100 billion in annual sales. At a 25% operating margin, that's $25 billion a year in operating profit just for IFS. Adding $25 billion a year in operating profit from Intel Products makes Intel a $50 billion annual operating profit business. So how on earth does that translate to a price target of $135 a share? It should be $500 to $800 at a minimum.
$Taiwan Semiconductor Manufacturing(TSM)$ TSM just dropped another monster number: $13.2B in May revenue, up 30% YoY. Feels like they keep getting stronger every month. Been staring at this report wondering how it's even real.
$Taiwan Semiconductor Manufacturing(TSM)$ Don't have to laugh at TSMC's target price, sometimes people quote it in the wrong currency. CLSA did give NT$3,030 in January, and Aletheia gave NT$3,000 in April. American analysts gave lower prices in April: GS at NT$2,750, MS at NT$2,588, JPM at NT$2,500. I haven't checked if they've revised their targets up recently. I just think there's no reason for TSMC's stock price to be way lower than the $467.84 1-year target on Yahoo Finance that's been sitting there for a while.
$Taiwan Semiconductor Manufacturing(TSM)$ NVDA did get the MACD golden cross yesterday, while the K-D golden cross occurred several days earlier. AVGO is in a similar situation. The K-D cross happened a few days ago, and the MACD golden cross formed today. That's typically how things unfold during a recovery phase – it's a mathematical/statistical fact. TSMC's RSI, after an orderly advance, is still under 70 (68.62 to be exact). TSMC seems to be in a sweet spot, if I can put it that way.
$Taiwan Semiconductor Manufacturing(TSM)$ On the topic of TSM and its investors, here's a thought. TSM's shareholder base is a mix between traders and investors. Having followed Cathie Wood for years, more out of curiosity than anything else, I have a pretty clear view that she's a very active trader, with minimal investor behavior. I've held my TSM position, like most of my portfolio, for multiple years and only “trade” when I've made an obvious mistake or need cash. So, you can put me in the investor camp. And right now, I don't see a reason to disturb my long-term position in TSM.
$Taiwan Semiconductor Manufacturing(TSM)$ Everyone is dependent on TSMC, even NVDA, Google, and MSFT who need their own chips made. I don't see a reason why TSM wouldn't make a new 52-week high soon, just like the other major tech stocks. The one that needs to drop is TSLA, which TSMC has reportedly stopped making chips for, due to the CEO's stance. Tesla is now forced to build its own TeraFab to make chips, supposedly coming online in 2029. With TSMC refusing to extend the current contract, Tesla is at risk of running out of AI chips for their cars. Let's see if Elon can get TeraFab built before 2030.