TSMC: Why I Took Profits (Rating Downgrade)

Summary:

• Recently I sold my long-standing position in Taiwan Semiconductor Manufacturing, after notifying my readers on Seeking Alpha and X.
• I sold mainly because I was sitting on a substantial gain while not seeing a lot of growth potential in the year ahead.
• Semiconductors are very cyclical and we are already nearly two years into the AI-driven cyclical up-trend. Sector-wide growth deceleration is virtually guaranteed in my opinion.
• I don’t think that TSM is actively overvalued, but merely fairly valued. This makes TSM shares less interesting to me than other opportunities I have my eye on.
• For this reason I’m downgrading my TSM rating to hold.

Taiwan Semiconductor Manufacturing (NYSE:TSM) is a stock that I have been holding for a few years now. I bought it after I first heard that Berkshire Hathaway (BRK.B) had invested in it in

Analyst’s Disclosure: I/we have a beneficial long position in the shares of BRK.B either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha’s Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.