Should you invest in TSMC stock in Q4 amid surging global semiconductor sales?
- TSMC shares on Tuesday edged higher 1% after a semiconductor report showed surging global sales.
- According to the Semiconductor Industry Association’s report, sales increased by nearly 29.7% Y/Y in August.
- As a result, Taiwan Semiconductor Manufacturing Co. sales grew by 10.3% in August.
On Tuesday, Taiwan Semiconductor Manufacturing Co. Ltd (TAI:2330) shares edged higher 1% after the latest Semiconductor Industry Agency report showed surging global sales. According to the report, global semiconductor sales increased by 29.7% in August compared to the same period a year ago, and by 3.3% sequentially.
All the major regions registered significant growth in sales, with Europe and China registering an increase of 33.5% and 30.8%, respectively. Americas realised a growth of 30.6%, while Japan sales increased 23.8%. On the other hand, the Asia Pacific and the rest of the world registered a growth of 28.2%.
As a result, semiconductor company sales increased during the month, with TSMC’s rising 10.3% from the previous month.
Should you bet on TSM’s growth?
Copy link to sectionFrom an investment perspective, TSM shares trade at reasonable trailing 12-month P/E and forward P/E ratios of 28.38 and 22.64, respectively, making the stock attractive to value investors.
Moreover, analysts expect TSMC earnings per share to grow by 50% this year before rising at an average annual rate of about 16.10% over the next five years.
Therefore, growth investors could find the stock a compelling option amid its exciting growth prospects.
Has TSMC found support?
Copy link to sectionTechnically, TSMC shares appear to have recently pulled back to trade closer to the oversold conditions of the 14-day RSI. However, the stock also seems to have found solid trendline support around the $107.90 level.
Therefore, investors could target potential rebound profits at about $112.69 or higher at $116.90. On the other hand, if the decline continues, triggering a channel breakout, it could find support at $103.45, slightly below the $107.90 support.
A rebound seems imminent
Copy link to sectionIn summary, with TSMC shares trading within a highly volatile sideways channel formation, the stock seems poised for an immediate rebound after the recent pullback. Moreover, the stock has moved closer to the oversold conditions, creating a recovery opportunity.
Therefore, given the company’s exciting growth prospects, it could be time to buy the stock ahead of the upcoming upward swing.
