TSM
TSMC
Hybrid Industrial
★ Quality 82/100Price today
$420.49
what the market pays
Worth
$126.36
calculated cycle value
Price is 233% above its value
charlieapp.co
Price vs Intrinsic Value
The line is the price month by month; the green band marks when it's undervalued (−20% off value). When the price drops in there, the discount is real, not opinion.
Where does the value come from?
Manufacturing + technology
$126.36
per share
How it's calculated
Free cash flow is depressed by record capex (~$41B FY2025 → $52-56B FY2026 for 2nm fabs); normalized gives a higher value (~$195/ADS). Monopoly in sub-3nm chips, ~25% growth, 35% ROE, net cash. Geopolitical penalty (>80% of capacity in Taiwan). The market pays well above the calculated value, betting on AI demand.
Total calculated value
business + cash
How many times the cash flow
Hybrid Industrial · vs 28 peers
You pay 81.2x times this business's cash flow; its sector median is 33.7x.
70% above what Charlie thinks it's worth (24.4x) — you're overpaying, sector or no sector.
Why Overvalued?
Its free cash flow is $5.18/share × 24.4x multiplier = $126.36 in intrinsic value. Today's price of $420.49 is 70% above the calculated value — the market is paying a premium over what the model sees as fair.
The price is 233% above the calculated value. You're paying more than it's worth.
Buying here lowers your expected return and wipes out the safety margin.
The next reasonable entry zone starts at $120.04.
At what price would buying make sense?
Entry zones
🟢 Undervalued
≤$101.09
-20% off Value
🟡 Discounted
≤$120.04
-5% off Value
🔴 Today
$420.49
-70% Valor
Overvalued
The market prices it too high versus what the business makes. Patience pays off here.
“Time is the friend of the wonderful company, the enemy of the mediocre.”
— Warren Buffett
Model updated · July 2026
The business
Makes the chips that Apple and Nvidia only know how to draw.
TSMC is the foundry: it manufactures on demand the chips others design (Apple, Nvidia, AMD) who never touch a single wafer. It charges per wafer, and the more advanced the process —3, 2 nanometers— the pricier and higher the margin. It's the workshop where the world's silicon is cooked.
Nobody else manufactures profitably below 3 nanometers. That can't be copied with money: it's decades of know-how, tens of billions in fabs, and a scale no rival matches. Samsung and Intel are chasing; TSMC is years ahead.
Revenue history
From $75.9B to $140.0B in 4 years — nearly 1.8x its size. Selling more and more is the base of everything else.
Catalysts and risks
Volume production of 2nm starting 2025-2026, with capex of $52-56B.
Demand for artificial intelligence chips growing at double digits annually.
New fabs in Arizona and Japan to dilute concentration risk.
More than 80% of capacity is in Taiwan, in China's geopolitical crosshairs.
Record capex depresses free cash flow today; the normalized value is higher.
The semiconductor business is cyclical: demand swings up and down hard.
Charlie's note
“Paying 24 times earnings for a business that grows 25% with 35% returns and net cash isn't crazy. What you can't diversify is that almost everything is made on an island China claims; the market pays for AI and prefers not to think about the map.”
Analysis · July 2026
So when would be a good price for TSMC?
By our calculation, not yet. We will email you the day it drops to $120.04 — so you do not have to keep checking.
🔔 Email meFree · no card
Charlie informs, it doesn't advise. No information should be taken as a recommendation to buy or sell.