10 Best Major Stocks to Buy According to Hedge Funds

8. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)

No. of Hedge Fund Holders: 158

Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is a Taiwanese company that designs and manufactures semiconductors. The company manufactures products for various applications that target a wide range of end markets including high-performance computing, smartphones, the Internet of Things (IoT), automotive, and digital consumer electronics. TSM holds a major share in contract chip manufacturing and advanced chip manufacturing.

On January 17, Barclays analyst Simon Coles upgraded the price target on TSM shares from $240 to $255 and gave the company an Overweight rating. The analyst kept the rating following the company’s strong Q4 2024 results. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) solidified its position as the leading semiconductor manufacturer, with strong demand for advanced process nodes driving revenue growth. TSMC’s Q4 revenue soared by 37% year-over-year to $26.88 billion, driven by increased sales of 3nm and 5nm technologies. The company’s gross margin for Q4 was 59%, fueled by higher capacity utilization and productivity gains. In addition to that, the company maintains its dominance in cutting-edge semiconductor technology, with its advanced technologies accounting for 74% of wafer revenue in Q4.

Wedgewood Partners, an investment management company, discussed Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) in its Q4 2024 investor letter and said:

“Taiwan Semiconductor Manufacturing was another top contributor to performance during the quarter and for the year. The Company’s earnings growth dramatically accelerated compared to last year as the Company’s wafer fabrication and packaging volumes soared in 2024. In addition, the Company’s customer prices rebounded in the face of more normalized capital expenditures. The Company maintains a near-monopoly in the fabrication of nearly every new AI accelerator brought to market over the past two years. They continue investing tens of billions in building and 7ill future capacity with orders for what seems to be insatiable hyperscale demand for accelerated computing. The stock ended the year trading at a consensus forward earnings multiple that is several points lower than large-cap growth benchmarks, despite the Company’s dominant position in the most important industry that is driving one of the largest technological shifts in a generation.”