Dividend Data on $TSM (Nov 5, 2026)
After falls of 8.72% today and 26.41% over the past month (still up 11.86% year to date), TSMC is a pretty attractive opportunity: arguably the world's most indispensable chipmaker, a constraint on AI data-center buildout that won't risk excess capacity. Record EPS, up 57.5% year over year and 325% over five years, operating cash flow up 45.63% to $95.94 billion, free cash flow $45.73 billion (69% higher), gross margin 66.4%. At 24.15 trailing and 21.73 forward P/E it is historically cheap; AI will need a lot of chips in coming years.
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And here's a hint at where the rest of the companies on this list might come from—they're companies in the supply chain for building AI data centers, like TSMC, which makes chips designed by Nvidia.
The third stock I'm going to share today is Taiwan Semiconductor Manufacturing Company, whose ticker symbol is TSM. This stock is down 8.72% today. It has fallen by 16.34% in the last five days and 26.41% in the last month.
However, it has increased by 11.86% since the beginning of the year.
It is arguably the most indispensable company in the world. They produce all kinds of high-quality AI semiconductor chips and many kinds of general-quality chips. They make many of Apple's chips used in iPhones and other products.
Their business is diverse, but AI is becoming their largest business sector. It has proven to be a great company in the long run. And as you can see, if you look at their earnings per share, they just hit a record high for quarterly earnings.
Their EPS has grown 325% in the last five years and in the last quarter it increased 57.5% compared to the previous year.
They are currently trading at a trailing 12-month P/E ratio of 24.15 and based on future valuation it is 21.73. So, it's historically cheap for Broadcom over the past five years, but if we bring the time frame down to three years, it looks even cheaper.
This is important because the development of AI chips has accelerated rapidly in the last three years.
If you follow AI and AI data centers, TSMC is one of the most important companies, as they are seen as one of the constraints in this construction. Because these companies are the ones that primarily make chips, and they are not able to scale up their production as quickly as companies like Nvidia or Broadcom want to.
Nvidia is constantly urging TSMC to increase production, making more chips. Because Nvidia now knows that if they had more chips, they could sell a lot more chips. They say this every quarter.
Now, if we look at TSMC, we see that their operating cash flow has increased drastically. This is an increase of 45.63% over the previous year, amounting to operating cash flow of $95.94 billion.
Now, this is quite intriguing. This is how the supply chain works. TSMC makes a lot of money making chips for companies like Nvidia, Apple, and Broadcom, who in turn make even more money using those chips.
However, TSMC's capital expenditure is much higher because they have to build chip manufacturing factories, or fabs. So, this is one of the reasons why production is not getting bigger.
Because they don't want to take the risk of creating excess production capacity.
So, in the last 5 years, it has taken a lot of effort to convince TSMC to increase their capital expenditure by 95%. They only increased it by 95% and despite this more capital-intensive business model, TSMC still generates a lot of free cash flow, which is $45.73 billion in the last 12 months and 69% more than the previous year.
TSMC makes chips for all the major companies in the world. It does this not only for Nvidia, Microsoft, Alphabet, Tesla, Nvidia, but even for Intel, which is quite surprising because Intel has its own fab.
Smaller companies like Qualcomm, Broadcom, AMD, Analog Devices, Marvell Technology, and Cerebras, which I'm not including in this video, but their stock prices have fallen a lot which is quite interesting.
I need to do more detailed research on that company.
So, on a day like today when TSMC shares are down 8.91% and have sold off a lot in the past week, I think this is a pretty attractive opportunity. An investment in TSMC means an investment in chip manufacturing as a whole, and if you follow AI, you know we're going to need a lot of chips in the coming years.
TSMC has not increased its profit margin to the point where it would put pressure on companies with high revenue like Nvidia. They only increased profits slightly. Their profit margins are already great, with a gross margin of 66.4% and a net margin of 51.1%, but this is not the case for all semiconductor manufacturers.