Taiwan Semiconductor Manufacturing Company Ltd. (TSM)

FairStock Score: 81/100 — HIGH CONVICTION

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

I look for businesses that earn high returns on capital and do not lean on debt. Taiwan Semiconductor fits much of that: in fiscal Q2 2026, the latest quarter shown, revenue was $1.3T and net income was $706.6B, a 55.62% net margin. Those are exceptional figures. FairStock calculations show ROE of 39.97%, ROCE of 19.00%, and debt-to-equity of 0.17. That suggests a high-quality manufacturing franchise with scale and customer switching costs in advanced chips. The balance sheet looks conservatively financed, and a Piotroski F-Score of 7/9 supports improving fundamentals. But price matters. At the 2026-10-16 close of $412.61, FairStock's P/E is 30.81 and P/B is 84.38. The Graham Number is $273.37, leaving a negative margin of safety of -54.46%. So the market is paying a rich price for the business. The PEG ratio of 0.41 and FCF yield of 57.4% suggest growth and cash generation may justify some premium, but the P/B and Altman Z-Score of 2.01 caution against calling it cheap. I also note the Lynch category is none because only 0 years of filed results are available, versus 3 needed; that limits long-term historical judgment. Great business, but not a Graham bargain at this quote.

In plain English: Taiwan Semiconductor makes integrated circuits and other semiconductor devices for customers around the world. The business looks strong: in the second quarter of fiscal 2026, revenue was $1.3T and net income was $706.6B, with a 55.62% net margin. At the 2026-10-16 close of $412.61, the price looks expensive versus the value of its assets and a conservative profit-based estimate, even though growth-adjusted measures look more reasonable.

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Data as of 2026-10-16 close · note generated 2026-10-20 · model deepseek-flash

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer