Chip Giant TSMC Trading At Discount Despite AI Boom

While NvidiaNVDA

hogs the AI spotlight, the real workhorse behind it trades at bargain prices. Taiwan SemiconductorTSM

, which holds the lion’s share of global chip manufacturing, finds itself strangely undervalued compared to peers. With shares trading well below historical averages, this AI backbone offers sector exposure without the premium price tag.

• Despite April’s 48% revenue growth from last year,TSM
  trades at just 15.7x forward earnings (vs. 19x average) — remarkably less thanNVDA
  ’s 30x and even the S&P 500’s 21x average.
• The chipmaking titan projects “mid-20s percent” sales growth for 2025 and ~20% annually over the next five years — pouring $100B into US manufacturing to offset Chinese-borne threats.

Chips with everything: Despite semiconductor volatility and tariff storms, TSMC’s technological moat remains unmatched, with 67% of global chip manufacturing revenue. While Nvidia commands higher margins, justifying its premium valuation, a Thornburg portfolio manager puts it plainly: If you believe AI will transform the world, every AI chip needs a manufacturer, and that’s TSMC. In the AI gold rush, TSMC sells more than just picks and shovels — it controls the entire mine.