Valued at $1.7 trillion, Taiwan Semiconductor Manufacturing (TSM) is the largest dedicated integrated circuit foundry in the world. Since the Trend Seeker system signaled a new “Buy” on Dec. 26, the stock has gained 15.6%, highlights Jim Van Meerten, analyst at Barchart.
TSM’s customers include the largest chip companies. This makes Taiwan Semi a key player in all things related to Artificial Intelligence (AI). Another way to think about it is that Taiwan Semi’s quarterly results are an indicator of demand and growth in AI chips. If Nvidia Corp. (NVDA) and its peers keep needing more and more chips, Taiwan Semi’s business should grow.Taiwan Semiconductor Manufacturing (TSM)
I found TSM by using Barchart’s powerful screening functions to sort for stocks with the highest technical buy signals, superior current momentum in both strength and direction, and a Trend Seeker buy signal.
The stock just scored a new all-time high of $351.20 on Jan. 15. It has a weighted alpha of +84.9 and a Relative Strength Index (RSI) at 73.6. There’s a technical support level around $324.67.
Given that Taiwan Semiconductor is the leading integrated circuit foundry, its results matter for all AI chip companies. Because Wall Street seems pleased with its Q4 results, there could be sustained momentum in its shares and those of companies like Nvidia.
However, the AI trade has been volatile over the past 52 weeks. Any renewed concerns about a bubble bursting could create at least a short-term selloff in TSM stock.
