TSMC Matches 70% Gross Margins and Remains a Multibagger Favorite
TSMC recently matched Nvidia's gross margins in the 70% range, driven by severe supply bottlenecks and pricing power. Analysts continue to label TSMC a multibagger, citing its dominant wafer-manufacturing franchise and resilient profitability.
1. Margin Parity with Nvidia
TSMC's latest margin data shows gross margins reaching the high-70% range, placing it alongside Nvidia and Broadcom. This performance reflects severe supply constraints in chipmaking, which have granted TSMC strong pricing power and protected its profitability.
2. Multibagger Outlook
Despite being a 'one trick pony' focused on wafer fabrication, TSMC retains multibagger appeal due to its leading-edge process technology, robust demand from hyperscale customers and sustained capacity tightness. Investors highlight its consistent earnings growth and market share gains as key drivers of future returns.