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.
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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?
From 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?
Technically, 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
In 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.
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