10 Most Widely Held Stocks by Hedge Funds

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

Number of Hedge Fund Holders: 156

Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) ranks eighth on our list of the most widely held stocks by hedge funds. TSMC is a semiconductor manufacturing and design company. The leading fabrication entity makes chips for tech giants including Nvidia and AMD.

In the second quarter of 2024, the company’s revenue increased by 13.6% sequentially, led by growing demand for its nanometer technologies. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) expects revenue from AI chips to increase at a compound annual growth rate (CAGR) of 50% by 2027. For the year ended 2024, TSMC projects a 20% growth in revenue, again driven by the demand for chips used in artificial intelligence.

TMSC expects its 2024 capital expenditure budget to lie between $30 billion and $32 billion. Of this, 70% to 80% of the budget will be allocated to advanced process technologies, nearly 20% will be directed to specialty technologies, and 10% will be spent on advanced packaging, testing, and mass-making. In addition to that, TMSC formed a joint venture, European Semiconductor Manufacturing Company (ESMC), with Robert Bosch GmbH, Infineon Technologies AG, and NXP Semiconductors N.V. to launch a semiconductor fab in Dresden, Germany. This fab will be the EU’s first Fin-FET capable pure-play foundry.

Despite macro headwinds and geopolitical turmoil in the country, analysts are bullish on the stock, and their 1-year median price target of $209 points to a 20% upside from current levels. Overall, TSM was held by 156 hedge funds at the close of Q2 2024 with total stakes amounting to $21.28 billion.

Diamond Hill Capital stated the following regarding Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) in its Q2 2024 investor letter:

“On an individual holdings’ basis, top contributors to return in Q2 included our long positions in Alphabet, Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) and Microsoft. Semiconductor manufacturer Taiwan Semiconductor’s (TSMC) fundamentals remain solid as demand for its chips continues growing — particularly as the machine learning and cloud computing trends gain more traction.”