Is it still worth entering the market to buy TSMC stock in 2026?

TSMC has been a focal point in the global stock market over the past few years, especially in 2025, when its stock price astonishingly surged over 50%. As we enter 2026, is this Taiwanese semiconductor giant still worth continuing to buy in the new year? The Motley Fool analysts believe that TSMC (NYSE: TSM)) has not only performed excellently in the past but also maintains a very optimistic outlook for the future. With the booming development of artificial intelligence, TSMC’s potential will undoubtedly continue to attract investors’ attention. Wall Street analysts forecast that TSMC could achieve revenue growth of up to 21% this year. TSMC’s potential in the semiconductor field is evident and will continue to draw significant investor interest. Especially with the $500 billion order from NVIDIA driving growth, TSMC is expected to benefit from this and further boost its revenue. Market observation only, not investment advice.

TSMC’s Market Opportunities

TSMC has consistently held a leading position in the global semiconductor foundry market, demonstrating strong performance in 2025. As the world’s largest semiconductor foundry, TSMC’s business spans multiple sectors, with the most notable being the artificial intelligence market. Since TSMC manufactures chips for many major chip companies, including Nvidia, AMD, and Broadcom, it plays a crucial role in AI development. Most AI chips designed by these companies are produced by TSMC, allowing it to fully benefit from the rapid growth in this field.

The expanding applications of AI, especially the surge in data center demand, present enormous growth potential for TSMC. Wall Street analysts predict that TSMC’s revenue growth rate will reach 21% in 2026. For a company with a market value close to $1.6 trillion, such growth is undoubtedly impressive. Although currency fluctuations may impact dollar-denominated growth rates, TSMC’s market position and future growth expectations remain very stable.

Valuation and P/E Ratio of TSMC Are Reasonable

Compared to other large tech companies, TSMC’s valuation appears relatively low. Its P/E ratio( is expected to stay around 24, indicating that its stock price is still quite affordable relative to other major tech firms. While a P/E ratio does not necessarily mean the stock is cheap, it shows that TSMC’s current stock price is not overvalued. Therefore, if you’re looking for a company with solid growth potential, TSMC is undoubtedly worth considering.

Compared to the S&P 500 index (which typically grows about 10% annually), TSMC’s expected growth rate is significantly higher than the market average. This makes TSMC a popular investment choice for 2026.

TSMC Holds 72% of the Wafer Manufacturing Market Share

AI technology has penetrated various industries, from data centers to smartphones and electronic devices, all of which rely on chips. TSMC’s advantage in wafer manufacturing lies in its production of high-efficiency AI chips for companies like Nvidia and AMD, and it holds nearly 72% of the global foundry market share, far surpassing Samsung’s 7%.

TSMC Has a $500 Billion Order from Nvidia

Another factor supporting TSMC’s future growth is its close partnership with Nvidia. Nvidia) NVDA( collaborates closely with TSMC in GPU manufacturing. Nvidia’s Rubin architecture is expected to launch in 2026, featuring a high-efficiency chip based on TSMC’s advanced 3nm process, designed to deliver higher computing power at lower power consumption. Nvidia currently has a backlog of $500 billion in orders, providing solid support for TSMC’s future business growth.

Such collaboration not only helps drive TSMC’s revenue growth but also highlights its critical role in the global high-tech industry. As demand for AI increases, TSMC’s order volume and revenue are expected to further rise.

TSMC’s Growth Potential

TSMC’s stock price still has enormous upside potential. Even amid the AI boom, TSMC’s stock appears somewhat undervalued compared to competitors. Based on the Price/Earnings to Growth (PEG) ratio, TSMC’s ratio is close to 1, indicating that its stock is very attractively priced in the current market environment. For high-quality stocks with PEG ratios between 2 and 2.5, investors are usually willing to pay a higher price, and TSMC fits this category.

Furthermore, as TSMC continues to strengthen its dominant position in the global chip market, the company is expected to maintain high growth in the coming years. Analysts forecast that TSMC could achieve an average annual growth rate of nearly 29% over the next three to five years, providing investors with stable and predictable returns.

Is it still worth entering to buy TSMC stock in 2026? Originally published on Chain News ABMedia.