Episode
TSM Stock: It Makes 90% of the World’s AI Chips — And It’s Cheap
- Published
- Jul 17, 2026
- Duration seconds
- 759
- Processing state
not_requested
Actions
POST https://stenobird.com/v1/public/podcasts/charged-alpha-stock-encyclopedia-7819792/episodes/tsm-stock-it-makes-90-of-the-world-s-ai-chips-and-it-s-cheap/transcription-requests
Idempotently request low-priority transcript generation for this episode.GET https://stenobird.com/podcast/charged-alpha-stock-encyclopedia-7819792/tsm-stock-it-makes-90-of-the-world-s-ai-chips-and-it-s-cheap.md
Read the agent-friendly Markdown representation of this episode resource.
Summary
Taiwan Semiconductor (TSM) Q2 2026 — Taiwan Semiconductor (TSM), the world's dominant chip foundry (~90% of leading-edge manufacturing), reported a big Q2 2026 beat: ADR EPS of $4.31 (vs $3.82 est), with gross margin expanding to 67.7% and a 60.3% operating margin, driven by AI/high-performance-computing demand. The ADR (~$410, ~15% off its $479 high but nearly doubled off its $224 low) dipped ~2% on profit-taking. It trades ~25x forward for 25%+ growth; the Street target is ~$576 (+40%). The key risk is geopolitical (Taiwan). Taiwan Semiconductor is arguably the single most important company for the AI age: it physically manufactures nearly every advanced chip — Nvidia's GPUs, Apple's iPhone processors, AMD's — on machines it buys from ASML, with roughly 90% of the world's leading-edge production and essentially no competition. Q2 2026 was a big beat (ADR EPS $4.31 vs $3.82), with gross margin expanding to ~68% and a 60% operating margin — software-like economics for a manufacturer, powered by the AI/HPC supercycle. Its newest nodes (3nm, 2nm ramping) are sold out, giving it real pricing power. So why does the best business in tech trade at only ~25x? One reason: Taiwan. The geopolitical tail risk — a conflict or blockade — is severe and un-hedgeable, and it's the permanent discount on the stock. But at ~25x for 25%+ growth, a lot of that risk is priced in. Our owner-earnings work lands fair value near $500 (vs ~$410), below the Street's ~$576. Our call: BUY, 3/5 — the indispensable AI chipmaker at a discount to its growth. Own it, use Taiwan-headline dips to add, and size for the one risk you can't diversify away. Not financial advice. THE CALL: BUY (3/5, THE INDISPENSABLE AI CHIPMAKER — CHEAP, MIND THE TAIWAN RISK) — base-case value ~$500 vs ~$410 today. What to wat…