Taiwan Semiconductor is Thursday's selection for IBD 50 Stocks To Watch as it heads for a seven-day winning streak. TSM stock currently hovers just above the top of a 5% buy zone from an entry at 248.28.
Shares are trading just a notch above their buy zone that goes up to 260.70. TSM stock broke out of an early-stage flat base on Tuesday and gapped up on Wednesday to its all-time high of 264.58.
Other chart signals support the breakout. The blue dot on its chart on IBD MarketSurge shows that its relative strength line is at a new high while the early-stage base promises greater net gains.
Taiwan Semiconductor manufactures advanced chips for artificial intelligence applications. Its partners include Nvidia and Apple.
The chip manufacturer reported August sales growth of 34% year over year on Wednesday.
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Shares gained after the company's second-quarter results on July 17. Growth accelerated for the second continuous quarter as earnings rose 79% to $2.63 per share. Sales also picked up from the prior quarter and grew 54% to $32 billion.
For the current quarter, analysts estimate earnings of $2.60 per share, marking 33% growth. Revenue is expected to climb 35% to $32 billion, slightly below the company's forecast of $32.4 billion at the midpoint.
TSM Stock: An IBD Tech Leader
In addition to the IBD 50, Taiwan Semiconductor also sits on the IBD Tech Leaders list.
TSM stock has a best-possible Composite Rating of 99 while its Earnings Per Share Rating is nearly ideal at 98. Its Relative Strength Rating, which compares the stock's performance with others in the Investor's Business Daily database over 52 weeks, sits at 89.
Mutual funds have been net buyers of the stock over the past 13 weeks, giving it an Accumulation/Distribution Rating of B-. More funds have added the stock to their holdings in each of the past six quarters.
In the IBD mutual fund index, the Janus Henderson Forty Fund, the Allspring Growth Fund, the MFS Growth Fund, the JP Morgan Large Cap Growth Fund and the Fidelity Contrafund hold shares of TSM stock.
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