Taiwan Semiconductor (TSM): Ken Fisher’s Top Pick for Tech Growth Amid Global Shifts

We recently published a list of 10 Best Stocks to Buy According to Billionaire Ken Fisher. In this article, we are going to take a look at where Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) stands against other best stocks to buy according to Billionaire Ken Fisher.

Ken Fisher is a prominent American investor and financial analyst, known for founding Fisher Investments in 1979. Born in San Francisco in 1950, he is the son of influential stock investor Philip A. Fisher. Fisher graduated from Humboldt State University with a degree in economics in 1972. He began his career in investment management and quickly made a name for himself through innovative approaches to investment theory.

Under Fisher’s leadership, the firm has been recognized for its investment strategies and has consistently ranked among the top investment advisers in the U.S. For several years, Fisher Investments has been included in the Financial Times’ list of top Registered Investment Advisors. Fisher is also a best-selling author, having written multiple books on investment strategies, and he is known for popularizing concepts like the Price-to-Sales ratio as a tool for stock analysis

Ken Fisher talked about the markets in a September 2024 video that was posted on his firm’s YouTube channel, Fisher Investments, and mentioned that he frequently gets asked about which sectors he believes will outperform or underperform over the next 18 months. He currently sees the market in the later stages, though not at the end, of a somewhat unusual bull market shaped by the unique challenges since COVID-19 began. As this bull market nears its two-year mark in October, he observes that while major trends may not shift significantly in the immediate future, technology stocks have consistently outperformed non-tech stocks since the market began to recover from the pandemic.

Fisher noted that, when the market sees substantial movement, up or down by half a percent or more, technology stocks tend to follow that trend more intensely. Thus, if the market is expected to rise, tech stocks will likely perform well; conversely, they often lag during market downturns.

Ken Fisher noted that as 2024 progressed, he expected value stocks to begin outperforming growth stocks more than they had in the past. While this expectation did not materialize in the first and second quarters, he observed that the trend started to emerge in the third quarter. However, he was surprised to see that energy stocks continued to underperform compared to most value stocks.

“As 2024 progressed, and as I said in prior videos early in the year, I expected value to start doing better relative to growth than it had been before. And that didn’t really much happen in the first and second quarters. But in the third quarter of 2024, that’s largely happened, with the exception of the fact that energy, and I was completely wrong about this, energy has continued to do worse than most value.”

Additionally, Fisher said that initially when the Fed began raising rates in 2022, many thought this would negatively impact growth stocks, a narrative he consistently disagreed with. Now, the sentiment is shifting again, suggesting that central bank rate cuts will benefit value stocks while adversely affecting growth stocks. This shift is logical because value stocks are more reliant on bank financing compared to growth stocks, which have various funding sources.

As short-term interest rates decline relative to long-term rates and banks become more willing to lend, this scenario favors value stocks. Consequently, Fisher anticipates that the trend of value stocks narrowing the gap with growth stocks, seen in the third quarter, will continue into the fourth quarter and throughout much of the next year.

This article explores the top ten stock holdings of Fisher Asset Management, based on 13F filings as of Q2 2024. The stocks are arranged in ascending order according to the stake of Fisher Asset Management, as of June 30, 2024.

At Insider Monkey we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).

A close-up of a complex network of integrated circuits used in logic semiconductors.

Total Number of Shares Owned: 28,407,252

Total Value of Shares Owned: $4,937,464,673

Number of Hedge Fund Investors: 156

Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), the world’s largest contract manufacturer of semiconductor chips, powers essential technologies across smartphones and data centers. With plans to expand manufacturing facilities in the U.S. and Japan, TSM is well-positioned to capitalize on shifting geopolitical landscapes and drive future growth.

Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)’s dedication to research and development strengthens its competitive edge, while its strong financial position and substantial cash flow enable ongoing investment in expansion and innovation, even amid economic uncertainty.

In Q3 2024, Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) posted robust results, achieving an EPS of $1.94, beating estimates by $0.15, and recording revenue of $23.63 billion, surpassing forecasts by $338.35 million. Anticipation builds for TSM’s upcoming Q4 earnings on January 10, 2025, with analysts projecting a normalized EPS of $2.17 and revenue of $26.22 billion.

Over the last 90 days, Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) has seen four upward EPS revisions, underscoring strong market confidence in its leadership within the semiconductor industry.

Overall, TSM ranks 6th on our list of best stocks to buy according to Billionaire Ken Fisher. While we acknowledge the potential of TSM, our conviction lies in the belief that under the radar AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than TSM but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.

Disclosure: None. This article is originally published at Insider Monkey.