5 Most Profitable Large Cap Stocks to Buy

4. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)

Net Profit TTM: $30.13 billion

Number of Hedge Fund Holders: 107

Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), based in Hsinchu, Taiwan, is a leading semiconductor foundry operator. It serves more than 500 customers and manufactures over 12,300 products for various applications including smartphones, high performance computing, the Internet of Things (IoT), automotive, and digital consumer electronics.

On October 19, Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) released its financial results for Q3 2023. Its revenue declined by 11% y-o-y to $17.3 billion, while net income shrunk by 25% y-o-y to $6.7 billion.

Following the earnings release, Needham analyst Charles Shi reiterated a ‘Buy’ rating for Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) shares with an unchanged price target of $115 which represents a potential upside of 19.57% based on the share price on December 5.

Wedgewood Partners, an investment management company, made the following comments about Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) in its “Wedgewood Partners Large Cap Focused Growth Fund” Q3 2023 investor letter:

“The Company [Taiwan Semiconductor Manufacturing] is lapping revenue growth of over +40% (compared to 2022) during every quarter of 2023, so it is more instructive to look at the health of the 5 business through the lens of a multi-year timeframe. Most of the Company’s customers have seen near-term weakness in demand due to pandemic normalization. However, we think the longer-term trend of more silicon per device is still very much intact, and the Company is well-positioned to serve this, given its commanding market share in leading edge capacity. The Company’s aggressive investment in leading-edge equipment combined with tight development with fabless IC designers, plus the embrace of open development libraries, should continue to foster a superior competitive position and attractive long-term growth.”