Taiwan semiconductor manufacturing (NYSE: TSM) Currently $ 1.14 is trillion stock. Therefore, for this to reach $ 2 trillion by 2030, it will need to increase to 75% in the next five years, providing 11% mixed annual growth rate (CAGR).

If you throw 1% of the Taiwan semiconductor into a dividend yield, it means that the stock will give about 12% returns in the next five years, TSMC (for short) must increase to become a $ 2 trillion company.

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This is a market-biting growth, which is actually looking for many investors. So, is this a realistic deadline? I think it is, but there are also indications that it will be a relatively slow growth rate compared to management.

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Taiwan Semiconductor is the top company in its purview

TSMC is the world’s top contract chip manufacturer. This means that it does not sell its chips in the open market; Instead, it provides their chip production services to those who cannot make self -chips – which is almost every major tech company.

TSMC is the major supplier Apple And NvidiaWith countless other identifiable names. It has become the top partner due to its best-in-class technologies and excellent chip yields, which keeps prices lower than its rivals.

As a result of all this, management has an excellent vision in the future because chip orders are often kept first year ago. This is especially true in the US, where its Arizona factory had already sold its capacity through 2027.

The management believes that in the next five years, AI -related revenue will have 45% CAGR. This is an incredible increase when it is relatively prolonged, and it results in a overall CAGR of about 20% for the next five years.

As mentioned, TSMC needs to increase its stock price by 11% each year to become a $ 2 trillion company. So if its revenue growth can directly translate into stock price appreciation, it is on the way to the $ 2 trillion market cap, causing the market to crush on the way.

But this will happen only when the stock is appropriately valuable.

TSMC Stock is not so expensive

Some stocks already have their price over the years of growth, so even though TSMC is expected to have about 20% CAGR in the next five years, which can already be cooked in stock price. Fortunately for investors, the stock trades at a reasonable level.

TSM PE Ratio (further) Data by Ycharts; Pay = value for Arjana.

23.3 times ahead of earningsTSMC’s stock is not as cheap as it was a few months ago, but it is still appropriate from the market perspective. S&P 500 22.8 times trades for further earnings, so both are given importance at the same level.

It is still a historically expensive evaluation for the broad market, so investors need to understand that the evaluation of both of them can go down as years of progress, which will eat in some of the stock performance that will distribute 20% CAGR in five years.

However, TSMC still has a lot of development to create $ 2 trillion stock and give market-strength development on the way. It is currently one of my top pics in the market, Since I believe it would be a winner, whether the AI ​​company has the best technology.

All these AI hypersscalers have to run their workloads through something, and there is a high probability that it is through Taiwan semiconductor manufacturing chips.

Should you currently invest $ 1,000 in Taiwan Semiconductor Manufacturing?

Before purchasing stock in Taiwan semiconductor manufacturing, consider this:

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When to consider Netflix This list was made on December 17, 2004 … If you have invested $ 1,000 at the time of our recommendation, You will have $ 713,547, Or when Nvidia This list was made on 15 April 2005 … If you have invested $ 1,000 at the time of our recommendation, You will have $ 966,931,