Tuesday's IBD 50 Stocks To Watch pick is Nvidia chipmaker Taiwan Semiconductor Manufacturing, which is back above a key level following Monday's rally. That makes Taiwan Semi stock one of the best ideas to buy and watch right now. Shares were up 2.3% Tuesday.
Taiwan Semiconductor, better known as TSMC, is the world's largest chip foundry. Its vast array of customers includes Apple, Nvidia, Advanced Micro Devices, Qualcomm and Broadcom. It is also a key player in artificial intelligence chips.
TSMC on Oct. 17 beat third-quarter estimates with a 57% increase in earnings on a 41% sales jump, per IBD MarketSurge. Chief Financial Officer Wendell Huang credited the results to "strong smartphone and AI-related demand for our industry-leading 3-nanometer and 5-nanometer technologies."
TSMC predicts fourth-quarter revenue will be in a range of $26.1 billion to $26.9 billion, well above Wall Street's target for $24.9 billion. Following results, Needham analysts noted that TSMC expects to triple AI revenue this year, likely reaching $13 billion.
For the full year, Wall Street analysts expect the company's earnings to grow 32%, with an increase of 30% in 2025.
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Nvidia Chipmaker At Buy Point
TSMC rallied more than 5% Monday, bullishly retaking the 50-day moving average line, which is a key level to monitor. Investors can use the high price of Nov. 22 at 193 as an early buy trigger.
Meanwhile, shares are tracing a consolidation with a correct buy point of 212.60. That consolidation shows elements of a double bottom, which would place an entry point at 206.61.
While the stock's relative strength line has rebounded in recent sessions, it remains far from its old highs. That means the Nvidia chipmaker has been underperforming the S&P 500 since mid-October. Look for that technical indicator to continue to strengthen over the coming weeks.
Amid powerful gains since 2022, TSMC stock shows a Composite Rating at a solid 95 out of a best-possible 99 from Investor's Business Daily, according to IBD Stock Checkup.
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Other Stocks To Keep An Eye On
Three recent IBD 50 Growth Stocks To Watch picks are among the best stocks to buy and watch.
| Company | Symbol | Buy point | Type of base |
|---|---|---|---|
| Atour Lifestyle | 29.15 | Consolidation | |
| GeneDx | 89.11 | Consolidation | |
| Rhythm Pharmaceuticals | 55.64 | Consolidation |
Source: IBD Data as of Dec. 3
Follow Scott Lehtonen on X at @IBD_SLehtonen for more on the best stocks to buy and watch and the Dow Jones Industrial Average.
