Is Taiwan Semiconductor Too Expensive Now?
Seeking Alpha
February 19, 2026
AI-Generated Deep Dive Summary
Taiwan Semiconductor (TSM) has been a standout performer in recent months, with its stock rallying 55% since September. While the company remains a key player in the semiconductor industry, concerns about its valuation have grown as it now trades at elevated multiples compared to historical averages. This raises questions among investors about whether TSM is still a worthwhile holding or if it has become overpriced.
The rally in TSM shares can be attributed to strong demand for semiconductors across various industries, including tech, automotive, and consumer electronics. The company's position as a leading semiconductor manufacturer has further fueled its growth, with many analysts highlighting its competitive advantages and long-term growth prospects. However, the rapid appreciation in its stock price has pushed its valuation metrics to levels that some argue may not be sustainable without continued strong earnings growth.
Investors weighing whether TSM is too expensive now must consider several factors. While the company's fundamentals remain solid, with robust revenue and profit growth, the high valuations leave room for potential volatility. Market participants are closely monitoring macroeconomic trends, such as interest rate hikes and global demand dynamics, which could impact semiconductor stocks like TSM. Additionally, competition in the industry and technological advancements pose risks that investors must evaluate.
For those following TSM, the key question is whether its growth trajectory can justify its current price tag. While it remains a critical player in the semiconductor space, the stretched valuations suggest caution for new investments. Investors may want to reassess their positions or consider waiting for potential pullbacks before adding to their holdings. Overall, while TSM's fundamentals remain strong, its high valuation and market risks make it a stock that requires careful consideration in the current environment.
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Originally published on Seeking Alpha on 2/19/2026