Jim Cramer Reveals Details Of Trump’s Tariff Negotiations & Discusses 10 Stocks

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

Number of Hedge Fund Holders In Q4 2024: 186

Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is the world’s largest contract chip manufacturer. The firm’s shares have lost 18% year-to-date due to investors’ struggling AI optimism. In his previous comments about Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), Cramer wondered whether the US would protect Taiwan in case of a Chinese invasion. His latest comments linked the geopolitical risks with the firm’s P/E ratio:

“Okay so I’m gonna give you, how to read that, you can dismiss it, but I’ll give it to you. Taiwan Semi, discount versus NVIDIA is how you look at it. The Taiwan Semi, the discount, it’s 17 versus 23 times earnings, that is simply the discount of, a, I don’t wanna say it, takeover, because that gets people scared. But an encroachment by the People’s Republic of China.”

“[On whether he thought there was a risk premium in chip stocks] Yes, because I was inquiring on why shouldn’t we be buying Taiwan Semi, and, the person said well yeah, why do you want that? You’re going to be watching every ship, every aircraft carrier, every drone and that’s why that’s 17 times earnings. It’s not just some aberration, it’s that there it is, that is the discount. And I think it’s a good way to look at it. I think that when you try to get certainty David, I like to find PE certainty. Because it’s like all we can count on. And there it is, like it’s bad.”