We recently published our analyst list of the 12 best ADR stocks to invest in. In this article, we’ll take a look at how Taiwan Semiconductor Manufacturing Co., Ltd. (NYSE:TSM) stands compared to other ADR stocks that are great investments.
American Depositary Receipts (ADRs) are certificates issued by U.S. banks that represent stock in foreign companies. ADRs simplify the process by allowing U.S. investors to buy shares in foreign companies as if they were U.S. stocks. This makes it easier for Americans to invest internationally and allows foreign companies to attract American investors without the complexity of listing directly on American stock exchanges.
Despite these advantages, fewer than 10% of large foreign companies are listed in the United States, as some companies’ high valuations reduce the need for U.S. listings. Additionally, many foreign companies are often family-owned and resist going public for fear of losing control or hurting their personal financial interests.
Also read: 12 Best Stocks to Invest in for the Next 3 Months and Top 8 Stocks to Buy in 8 Different Sectors for the Next 3 Months.
Donald Trump’s recent victory in the US presidential election is expected to have a significant impact on global markets, particularly on stocks in Europe, the UK, China and Canada. Analysts from Bloomberg, Yahoo, and CNBC provided insight into how these regions will respond to President Trump’s policies and market dynamics.
European markets are generally expected to struggle under President Trump. Emmanuel Cau, head of European equity strategy at Barclays, sees Europe as a “loser” in this scenario due to President Trump’s protectionist trade policies and the possibility of tariffs that could disrupt existing trade relations. suggests that it may have been done. President Trump’s historic stance on climate change and environmental regulation could also lead to increased competition for European companies, especially in the energy sector, where U.S. companies could benefit from deregulation. Analysts at Goldman Sachs echo those concerns, predicting that the Trump administration could create an unfavorable environment for European stocks, especially those that rely on exports to the United States.
For the UK, the impact of Trump’s inauguration as president has been mixed, but one is leaning toward caution. Bloomberg reported that intense competition in the US market risks exacerbating Britain’s existing economic stagnation. The UK’s dependence on trade with the US makes it particularly vulnerable to changes in US policy, particularly if President Trump pursues aggressive tariffs and trade barriers. Furthermore, uncertainty surrounding the Brexit negotiations could further complicate the UK’s economic situation under the Trump administration.
story continues
China will likely face direct challenges from President Trump’s trade policies, including increased tariffs on Chinese goods. President Trump’s statement signals his intention to impose significant tariffs on imports from China as part of a broader strategy to address trade imbalances and intellectual property concerns. This approach could lead to instability in the Chinese stock market as investors react to potential retaliatory measures by the Chinese government and changes in global supply chains. The expected tariff increases will also affect sectors that rely heavily on exports to the United States, potentially leading to lower profits for many Chinese companies.
In contrast to Europe and China, Canadian stocks could see a long-term boost from President Trump’s victory, despite the initial negative reaction following the election. Bay Street analysts believe that despite the tariffs, sectors such as commodities and natural resources could benefit from President Trump’s pro-energy policies and potential deregulatory efforts. However, there are concerns that President Trump’s proposed tariffs on Canadian imports could disrupt trade relations between the two countries.
As global markets continue to navigate the aftermath of the Trump presidency, investors face both challenges and opportunities. Increased tariffs, trade barriers, and potential deregulation efforts create a complex situation for foreign companies. Despite the uncertainty, there are still many foreign companies that offer attractive investment opportunities to U.S. investors.
Is TSM stock a good long-term buy?
Close-up of a complex network of integrated circuits used in logic semiconductors.
In this article, we used Finviz and Yahoo Finance’s stock screener to find the 30 largest foreign companies listed in the United States. We then obtained the average analyst price target and selected the 12 stocks with the highest upside potential as of November 27th. The list is ordered by analysts’ average upside potential.
Why do we care what hedge funds do? The reason is simple. Our research shows that by mimicking the top stock picks of the best hedge funds, you can outperform the market. Our quarterly newsletter strategy selects 14 small- and large-cap stocks each quarter and has returned 275% since May 2014, outperforming the benchmark by 150 percentage points (Learn more ).
Rise potential: 25.83%
Taiwan Semiconductor Manufacturing Co., Ltd. (NYSE:TSM) is the world’s largest dedicated semiconductor foundry. The company manufactures advanced chips for major customers such as Apple, NVIDIA, Qualcomm, and AMD. Taiwan Semiconductor Manufacturing Co., Ltd. (NYSE:TSM) is at the forefront of the semiconductor industry due to its cutting-edge technology, particularly in the production of 3nm and 5nm chips. Rising demand for high-performance computing, artificial intelligence, and 5G technology is driving the company’s growth. Additionally, the company is investing heavily in expanding its production capacity.
Taiwan Semiconductor Manufacturing Co., Ltd. (NYSE:TSM) is poised to dominate the semiconductor field with its cutting-edge 2nm chip technology. The company has already established dominance in advanced node technologies (3nm, 5nm, and 7nm) and is driving leadership in the AI and high performance computing (HPC) chip space. This advantage in advanced node technology ensures the company’s near-monopoly in high-demand chips and creates a significant barrier to entry for competitors.
Taiwan Semiconductor Manufacturing Company (NYSE:TSM)’s upcoming 2nm (N2) chips will introduce a gate-all-around (GAA) transistor structure. This is a significant advance in power efficiency and performance compared to current FinFET architectures. This innovation is essential as demand for high-performance chips continues to rise. N2 nodes reduce power consumption by 25% to 30% compared to N3E while delivering 10% to 15% performance improvement at the same power. The move to N2 increases transistor density by 15%, allowing chip designers to pack more computing power into a smaller space.
Taiwan Semiconductor Manufacturing Co., Ltd. (NYSE:TSM) is also building several new manufacturing plants that will increase production capacity and solidify its position as one of the world’s leading semiconductor foundries. The company’s $11 billion investment in a new semiconductor manufacturing facility in Dresden, Germany, represents a significant strategic shift toward regional diversification. This expansion will not only increase the company’s production capacity, but also reduce its dependence on a single region and increase its resilience to potential disruptions.
Overall, TSM ranks 9th on the list of best ADR stocks to invest in, according to analysts. While we acknowledge that TSM has the potential for growth, we believe AI stocks are more likely to deliver higher returns and achieve it in a shorter period of time. If you’re looking for AI stocks that are more promising than TSM but are trading at less than 5x earnings, check out our report on the cheapest AI stocks.
Read next: BlackRock’s 8 Best Widemot Stocks to Buy Now and 30 Most Important AI Stocks.
Disclosure: None. This article was originally published on Insider Monkey.
