My Taiwan Semiconductor Stock Price Prediction for 2025 | TSM Stock Prediction

Summary

In this video, the presenter provides a detailed stock price prediction for Taiwan Semiconductor Manufacturing Company (TSMC) by the end of 2025. With TSMC's strong connections to major tech companies like Nvidia, the stock price is expected to rise, with analysts forecasting earnings of $8.87 per share and a 26% growth rate. A target stock price range of $225 to $235 per share is deemed likely, though geopolitical tensions could impact the forward PE ratio and lead to price fluctuations. Investors are encouraged to consider these factors when making decisions about TSMC stock.

Takeaways

• 😀 TSMC is a key supplier to major tech companies like Apple, AMD, and Nvidia, benefitting from Nvidia's high demand and soaring stock price.
• 😀 Wall Street analysts estimate TSMC's earnings per share (EPS) to be $8.87 in 2025, a slight increase from previous predictions.
• 😀 The growth rate for TSMC in 2025 is projected at 26%, which will be applied to forecast 2026 earnings.
• 😀 TSMC's current share price is $187, with a forward PE ratio of 21, fluctuating between 10 and 30 over the past few years.
• 😀 By applying a 26% growth rate to the 2025 EPS estimate, the EPS for 2026 is forecasted at $11.18.
• 😀 Using the forecasted EPS and a forward PE of 21, TSMC's stock price target for 2025 is $235, with potential for a higher value based on a PE of 23 ($257 per share).
• 😀 In the event of a decline in the PE ratio due to geopolitical tensions, the stock price could drop to as low as $167 per share.
• 😀 A conservative estimate places the TSMC stock price range between $225 and $235 per share by the end of 2025, showing potential upside from its current price of $187.
• 😀 Geopolitical tensions, particularly involving the U.S., China, and Taiwan, could influence the PE ratio and impact TSMC’s stock price in either direction.
• 😀 The video emphasizes that these estimates are based on assumptions and should be used for informational purposes, encouraging viewers to make their own adjustments or decisions.
• 😀 The speaker introduces their book on stock evaluation, providing insights into their framework for evaluating stocks, which can be useful for viewers interested in learning more about the stock analysis process.

Q & A

What is the primary factor contributing to Taiwan Semiconductor Manufacturing's (TSMC) positive outlook in the video?

The primary factor is the soaring demand for Nvidia products, which has positively impacted Taiwan Semiconductor's stock price, as TSMC is a key supplier for Nvidia.

What is the earnings per share (EPS) estimate for TSMC in 2025?

The Wall Street analysts estimate that TSMC's earnings per share will be $8.87 in 2025, up from $8.36 just 90 days ago.

How is the growth rate for TSMC's earnings in 2025 projected?

The growth rate for TSMC's earnings in 2025 is projected to be 26%.

What is the forward PE ratio for TSMC as mentioned in the video?

The forward PE ratio for TSMC is 21, which is considered the midpoint between the extremes of 10 and 30 observed over the last three years.

What is the predicted stock price of TSMC for 2026 based on its 2025 EPS and growth rate?

By applying the 26% growth rate to the 2025 EPS estimate of $8.87, the projected EPS for 2026 is $11.18. Using a forward PE ratio of 21, the predicted stock price for TSMC in 2026 is $235 per share.

What range of stock prices could TSMC experience by the end of 2025 based on different PE ratios?

If the forward PE ratio increases to 23, the stock price could rise to $257 per share. If it decreases to 18, the stock price could fall to $211 per share. With a PE ratio of 15, the stock price could drop to $167 per share.

What is the most likely stock price range for TSMC by the end of 2025 according to the speaker?

The speaker estimates that the most likely stock price range for TSMC by the end of 2025 will be between $225 and $235 per share.

What key factor could cause fluctuations in TSMC’s forward PE ratio?

Geopolitical tensions, particularly between the United States, China, and Taiwan, could affect TSMC's forward PE ratio. Increased tensions may lead to a decrease in the PE multiple.

What does the speaker emphasize about the stock price target estimates shared in the video?

The speaker emphasizes that the stock price estimates are based on assumptions and estimates and should not be considered precise calculations. They are meant for informational purposes only, and viewers should make their own adjustments based on their judgment.

What additional resource does the speaker mention at the end of the video?

At the end of the video, the speaker mentions their book, which provides a framework for evaluating stocks. The book is available for sale and includes the methodology the speaker uses to assess stock investments.