Jim Cramer’s Latest Lightning Round: 11 Stocks to Watch

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

Number of Hedge Fund Holders: 156

When a caller referred to Taiwan Semiconductor Manufacturing Company Limited’s (NYSE:TSM) PE ratio, this is what Cramer had to say about it:

“The reason why that price-to-earnings multiple is so high is because they blow away the numbers. Turns out, it’s actually a lower price-to-earnings multiple. I think this company is the best in the business. They’re terrific. They are partners with Nvidia and I think you should own it.”

Taiwan Semiconductor (NYSE:TSM) plays an important role in the global semiconductor industry, specializing in the production, packaging, testing, and distribution of integrated circuits and a wide range of semiconductor components. As the largest semiconductor foundry worldwide, its facilities are integral to the operations of leading chipmakers, including Nvidia, AMD, Broadcom, and Qualcomm.

At the close of 2023, Taiwan Semiconductor (NYSE:TSM) reported an extensive customer base of 528, reflecting its capability to manufacture nearly 12,000 distinct products. In the third quarter, the company’s revenue surged by 36% year-over-year, reaching $23.5 billion. A fifth of this revenue was generated from the company’s cutting-edge 3-nanometer chip technology, highlighting the growing importance of advanced manufacturing processes in its business model. The company is preparing for the launch of its next-generation 2-nanometer chips, anticipated to debut in 2025 and ramp up in production by 2026. This upcoming technology is projected to deliver substantial efficiency improvements.

While we acknowledge the potential of TSM as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than TSM but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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