Value
6.5/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 3.5 |
| P/S | 10.0 |
| EV/EBITDA | 10.0 |
| Fwd P/E | 5.9 |
| PEG | 5.7 |
| Analyst target | 5.0 |
- ▸Forward P/E: 21.8x
- ▸PEG: 1.31
TSM · Why this verdict
Why Taiwan Semiconductor Manufactur (TSM) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictHOLD
Overall score7.3/10
ConfidenceMEDIUM
MacroCAUTIOUS
TrendMatrix Research · core thesis
Engine thesis — one sentence
TSM at $412.32 is a top-tier semiconductor compounder (Wide moat, 9/9 Piotroski, ROE 36%, 47% margins, 4/4 beats, 35% revenue growth) with HIGH conviction sizing — but V9 asymmetry at 0.3 (below the engine's 1.5 threshold)@spot fails with 2.1% upside to TP $421.06, near-52w-high (2.3% away), and elevated put/call 1.94 produce STARTER with action_note 'Wait for pullback.'
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Engine signal |
|---|---|---|
Quality 8.8 with notes 'Excellent ROE: 36%', 'Strong margins: 47%', 'Wide economic moat', 'Compounder quality: strong returns + growth', Piotroski F 9/9 — bull_case 'High-quality business' and peer_rank notes 'Best-in-class margins' confirm. Quality breakdown | ROE component stays at 10.0 and gross_margin component stays above 8.0 over next 2 refreshes. | →stable |
| CounterFCF/NI 38% RED FLAG shows AI capex is depressing cash conversion; capex super-cycle through 2027 may compress FCF/NI below 50% for an extended period. | ||
Bull_case 'Strong earnings beat streak (4/4)' with catalyst notes 'Perfect beat streak: 4Q' and growth notes 'Strong growth: 35% YoY' — 4 consecutive beats with revenue accelerating into the AI demand wave. Bull case (item 1) | Beat count holds at 4/4 with avg_surprise_pct above 5% by the 2026-07-16 print. | →stable |
| CounterSemi capex cycle peaks with AI demand normalization; revenue growth from 35% YoY can compress to 15-20% by 2H 2026 even with beats intact. | ||
V9 asymmetry at 0.3 (below the engine's 1.5 threshold)@spot gate failure with v9.upside_pct 2.1 vs downside_pct 7.3 and bear_case 'Analyst target reached - limited upside remaining' — TP $421.06 leaves $9 of upside above $412.32 spot. Engine gate (failed) | Analyst take_profit advances above $460 (11%+ above spot) restoring asymmetry_ratio above 1.5 within 2 refreshes. | →stable |
| CounterSell-side targets routinely lag TSM during AI-cycle re-rating phases; the gate trip is target-anchoring lag, not a top. | ||
Action_note 'Fundamentals strong but target reached (2.1% upside). Wait for pullback.' with entry_target $391.55 (5% below spot, entry_method 'support_atr_sticky') — STARTER sizing tells you accumulate on weakness. Engine summary | Price pulls back toward entry_target $391.55 within 2 refreshes restoring 7%+ upside to TP. | →stable |
| CounterTSM at the 52w high rarely gives 5% pullbacks during accelerating beats — waiting may mean watching the stock advance another 10-15% first. | ||
Risk.notes 'Elevated put/call: 1.94' and 'High IV: 73%' with options.put_call_ratio 1.937 — derivatives positioning is unusually bearish for a stock with 4/4 beats and HIGH conviction sizing. Options positioning | put_call_ratio retreats below 1.0 within 2 refreshes signaling derivatives capitulation. | →stable |
| CounterPut-heavy positioning often reflects long-vol hedges on concentrated AI-exposed positions, not directional shorts; the elevated put/call may be flow-driven, not sentiment. | ||
Quality 8.8 with notes 'Excellent ROE: 36%', 'Strong margins: 47%', 'Wide economic moat', 'Compounder quality: strong returns + growth', Piotroski F 9/9 — bull_case 'High-quality business' and peer_rank notes 'Best-in-class margins' confirm.
→stableQuality breakdown
- Expectation
- ROE component stays at 10.0 and gross_margin component stays above 8.0 over next 2 refreshes.
CounterFCF/NI 38% RED FLAG shows AI capex is depressing cash conversion; capex super-cycle through 2027 may compress FCF/NI below 50% for an extended period.
Bull_case 'Strong earnings beat streak (4/4)' with catalyst notes 'Perfect beat streak: 4Q' and growth notes 'Strong growth: 35% YoY' — 4 consecutive beats with revenue accelerating into the AI demand wave.
→stableBull case (item 1)
- Expectation
- Beat count holds at 4/4 with avg_surprise_pct above 5% by the 2026-07-16 print.
CounterSemi capex cycle peaks with AI demand normalization; revenue growth from 35% YoY can compress to 15-20% by 2H 2026 even with beats intact.
V9 asymmetry at 0.3 (below the engine's 1.5 threshold)@spot gate failure with v9.upside_pct 2.1 vs downside_pct 7.3 and bear_case 'Analyst target reached - limited upside remaining' — TP $421.06 leaves $9 of upside above $412.32 spot.
→stableEngine gate (failed)
- Expectation
- Analyst take_profit advances above $460 (11%+ above spot) restoring asymmetry_ratio above 1.5 within 2 refreshes.
CounterSell-side targets routinely lag TSM during AI-cycle re-rating phases; the gate trip is target-anchoring lag, not a top.
Action_note 'Fundamentals strong but target reached (2.1% upside). Wait for pullback.' with entry_target $391.55 (5% below spot, entry_method 'support_atr_sticky') — STARTER sizing tells you accumulate on weakness.
→stableEngine summary
- Expectation
- Price pulls back toward entry_target $391.55 within 2 refreshes restoring 7%+ upside to TP.
CounterTSM at the 52w high rarely gives 5% pullbacks during accelerating beats — waiting may mean watching the stock advance another 10-15% first.
Risk.notes 'Elevated put/call: 1.94' and 'High IV: 73%' with options.put_call_ratio 1.937 — derivatives positioning is unusually bearish for a stock with 4/4 beats and HIGH conviction sizing.
→stableOptions positioning
- Expectation
- put_call_ratio retreats below 1.0 within 2 refreshes signaling derivatives capitulation.
CounterPut-heavy positioning often reflects long-vol hedges on concentrated AI-exposed positions, not directional shorts; the elevated put/call may be flow-driven, not sentiment.
Per-dimension breakdown
Quality
8.8/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 10.0 |
| ROA | 10.0 |
| Gross margin | 8.4 |
| Op margin | 10.0 |
| Net margin | 10.0 |
| Current ratio | 8.5 |
| FCF quality | 3.0 |
| Moat | 9.0 |
| Piotroski F | 10.0 |
- ▸Excellent ROE: 36%
- ▸Strong margins: 47%
- ▸Earnings quality RED FLAG: 38% FCF/NI
- ▸Wide economic moat
Growth
10.0/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 10.0 |
| EPS growth | 10.0 |
- ▸Strong growth: 35% YoY
Momentum
7.4/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 2.5 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
7.5/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 6.8 |
| Analyst rating | 8.9 |
| Price target | 6.7 |
- ▸LLM news sentiment: +0.35 (n=5)
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.0 |
- ▸Negligible insider selling — $12,876,486 (0.001% of mkt cap)
Peer rank
6.0/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 8.1 |
| quality rank | 9.3 |
| growth rank | 6.7 |
- ▸Superior ROE vs peers
- ▸Best-in-class margins
Technical
4.7/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 2.1 |
| support resistance | 2.7 |
| 52w position | 9.4 |
Risk (lower is worse)
7.2/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 9.7 |
| days to cover | 9.0 |
| volatility | 3.8 |
| put call | 7.3 |
| implied vol | 5.2 |
| beta | 5.9 |
| debt equity | 9.3 |
Catalyst
6.5/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 6.0 |
| dividend safety | 5.2 |
| news activity | 8.0 |
- ▸Perfect beat streak: 4Q
- ▸Dividend: 90.0%
How the verdict was assembled
Engine trigger
Downgraded from BUY WAIT — price $418.45 has reached target $421.06. No upside to wait for.
Engine technical detail
verdict_path:
L4:PATH_C2_GARP|V8:TARGET_REACHED|SANITY:WAIT+price>=TPPassed (7)
- MOMENTUM:7.4>=5.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:48d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:0.1<1.5@spot
Warning (0)
none
Reward-to-Risk
0.08
Upside
+0.6%
Downside
8.0%
Sizing output
AVOID
SetupBREAKOUT — Golden cross, above all MAs, RSI 53, MACD bullish
EdgeNO_EDGE — No clear edge identified
SuitabilityMODERATE — Balanced profile
Investment implication
The C-path quality+growth combination triggered the HOLD_IF_HOLDING verdict: quality 8.8 and growth 10.0 both clear their thresholds, with asymmetric R:R of 0.08 supporting the read.
The strongest dimensions are Growth at 10.0, Quality at 8.8, and Sentiment at 7.5; the weakest are Technical at 4.7, Insider at 5.0, and Peer rank at 6.0. The V9 engine flagged 1 failed gate, producing an asymmetric reward-to-risk of 0.08 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Quality 8.8 with notes 'Excellent ROE: 36%', 'Strong margins: 47%', 'Wide economic moat', 'Compounder quality: strong returns + growth', Piotroski F 9/9 — bull_case 'High-quality business' and peer_rank notes 'Best-in-class margins' confirm.
Trip ifROE component falls below 7.0 or Piotroski F drops below 7/9.
- P2Bull_case 'Strong earnings beat streak (4/4)' with catalyst notes 'Perfect beat streak: 4Q' and growth notes 'Strong growth: 35% YoY' — 4 consecutive beats with revenue accelerating into the AI demand wave.
Trip ifBeat count drops to 2/4 with revenue growth below 15% YoY.
- P3V9 asymmetry at 0.3 (below the engine's 1.5 threshold)@spot gate failure with v9.upside_pct 2.1 vs downside_pct 7.3 and bear_case 'Analyst target reached - limited upside remaining' — TP $421.06 leaves $9 of upside above $412.32 spot.
Trip ifAsymmetry_ratio stays below 0.5 for 3 consecutive refreshes.
- P4Action_note 'Fundamentals strong but target reached (2.1% upside). Wait for pullback.' with entry_target $391.55 (5% below spot, entry_method 'support_atr_sticky') — STARTER sizing tells you accumulate on weakness.
Trip ifPrice falls below stop_loss $361.29 without entry_target triggering.
- P5Risk.notes 'Elevated put/call: 1.94' and 'High IV: 73%' with options.put_call_ratio 1.937 — derivatives positioning is unusually bearish for a stock with 4/4 beats and HIGH conviction sizing.
Trip ifput_call_ratio rises above 3.0 with negative news event in last 30 days.