Taiwan Semiconductor Manufacturing is the IBD Stock Of The Day as the world's leading chip foundry benefits from producing artificial intelligence chips for all the major players. TSM stock jumped Friday after customer Broadcom raised expectations for its AI chip sales.
Taiwan Semiconductor, better known as TSMC, is the top producer of advanced computer chips made at the smallest circuit nodes. Its customers include AI-chip makers Broadcom, Nvidia, Marvell Technology and Advanced Micro Devices.
On the stock market today, TSM stock rose 5% to close at 200.99.
TSM stock is in a cup-with-handle base with a buy point of 205.63, according to IBD MarketSurge charts.
However, aggressive investors could have used the stock's bounce off its 50-day moving average line and break from the downtrend of its handle as an early entry, according to IBD chart analysis. Friday's intraday high of 202.54 would mark the next possible early-entry point.
Taiwan Semiconductor shares were up as much as 5.8% on Friday before fading. TSM stock was responding to a bullish AI chip market forecast from Broadcom.
TSM Stock Is A Tech Leader
On Tuesday, TSMC said its November sales rose 34% in local currency from the same month last year. However, sales were down 12% from October.
The company is well positioned to meet or beat expectations for the fourth quarter, Wedbush Securities analyst Matt Bryson said in a client note. He has an outperform rating on TSM stock.
"Continued strength in AI builds and customer share gains should continue to bolster TSMC results (even with some offsets from softer mature foundry conditions)," Bryson said. In addition to cutting-edge chips for AI, Taiwan Semiconductor makes chips for such mature markets as PCs, telecom and automotive.
TSM stock ranks second out of 32 stocks in IBD's semiconductor manufacturing industry group, according to IBD Stock Checkup. It has an IBD Composite Rating of 95 out of 99.
Further, TSM stock is on the IBD Tech Leaders list.
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