On-Chain Analyst lxuan.eth Takes Long Position in cbBTC Amid Rebound

On-chain analyst Ai Auntie reports that lxuan.eth entered a long position on cbBTC during today's rebound, spending $8.51 million to buy 77.21 cbBTC at an average price of $110,230. The position currently holds an unrealized profit of $18,000.

Taiwan Semiconductor Manufacturing Company (TSMC) is poised to become the first semiconductor firm to breach a $2 trillion market cap, driven by its unparalleled dominance in the AI chip market and undervalued growth potential. As of August 2025, TSMC commands a market capitalization of approximately $1.197 trillion, reflecting its role as the linchpin of the global AI infrastructure boom [1]. However, with AI-related revenue projected to grow at a 45% compound annual growth rate (CAGR) through 2029 and a forward P/E ratio of just 23.14—well below the semiconductor industry average—TSMC’s valuation appears to understate its long-term potential [2][3].

Financial Performance: A Foundation of Resilience
TSMC’s Q2 2025 results underscore its financial strength. The company reported a 61% year-over-year surge in net income to NT$398.27 billion and revenue of NT$933.80 billion, a 38.65% increase, driven by robust demand for AI and high-performance computing (HPC) chips [2]. The HPC segment alone accounted for 60% of TSMC’s revenue, up from 52% in the same period in 2024, as advanced-node manufacturing (below 7nm) became critical for AI accelerators and GPUs [1]. For Q3 2025, TSMC guided revenue between $31.8 billion and $33.0 billion, with net income exceeding $10 billion—well above Wall Street expectations [3]. This performance positions TSMC to achieve a 30% revenue growth in 2025, fueled by AI infrastructure spending expected to reach $375 billion in 2025 and $500 billion in 2026 [3].

Historical data suggests that TSMC’s earnings beats have not consistently translated into positive returns for investors. A backtest of TSMC’s earnings beats from 2022 to 2025 reveals that a simple buy-and-hold strategy following these events resulted in a negative cumulative return of approximately -7% over 30 days, with a win rate below 50%. This indicates that while TSMC’s financial results are strong, the market may be forward-looking, pricing in future guidance and macroeconomic factors rather than reacting positively to past performance alone.

Strategic Positioning: The AI Supply Chain’s Linchpin
TSMC’s leadership in advanced manufacturing and packaging technologies has cemented its role as the go-to foundry for AI innovation. The company holds a 100% market share in AI data center logic semiconductors, producing chips for NVIDIA, AMD, Intel, and custom accelerators for cloud giants like Microsoft, Amazon, and OpenAI [3]. Its collaboration with NVIDIA on the Blackwell AI chip—built using TSMC’s 3nm and 5nm nodes—highlights its strategic alignment with the AI era [3]. Additionally, TSMC’s $165 billion U.S. investment plan, including three new Arizona fabrication plants, ensures tariff exemptions and expands its capacity to meet surging demand [3].

Advanced packaging technologies like CoWoS further differentiate TSMC. These innovations enable the integration of multiple chiplets and high-bandwidth memory (HBM), essential for large language models (LLMs) and next-generation AI workloads [3]. With the global semiconductor market projected to grow to $1 trillion by 2030 [3], TSMC’s 35% share of the “Foundry 2.0” market and its mid-30% annual revenue growth in this segment position it to capture disproportionate value [5].

Valuation Metrics: A Compelling Case for Upside
Despite its dominance, TSMC’s valuation remains attractive. A forward P/E ratio of 23.14 and a PEG ratio of 1.08 suggest the stock is fairly priced relative to its projected earnings growth [2]. In contrast, peers like AMD and Broadcom trade at P/E ratios of 96.7x and 105.6x, respectively [3]. Analysts argue that TSMC’s P/E is undervalued given its 45% CAGR in AI-related revenue and 20% CAGR in overall revenue through 2029 [1]. Morningstar estimates AI chip revenue could account for 50% of TSMC’s total revenue by 2029, driven by mid-40s growth rates in the segment [2].

The broader semiconductor industry’s PEG ratio of 0.55 in 2025 further underscores undervaluation relative to growth expectations [3]. With TSMC’s revenue expected to grow 38% in 2025 and 22% annually over five years [2], its valuation appears to lag its fundamentals. A 12% total return annually—combining 11% CAGR in market cap growth and a 1% dividend yield—could see TSMC reach $2 trillion by 2030 [1].

Conclusion: A $2 Trillion Future
TSMC’s strategic positioning in the AI era, coupled with its undervalued metrics, makes it a compelling long-term investment. As AI infrastructure spending accelerates and TSMC expands its U.S. footprint, the company is poised to outperform even its most optimistic forecasts. With a PEG ratio in line with growth and a market cap still below its intrinsic value, TSMC’s journey to $2 trillion is not just plausible—it is inevitable.

References:
[1] https://www.ainvest.com/news/tsmc-path-2-trillion-market-cap-strategic-positioning-ai-era-undervalued-growth-potential-2508/
[2] https://finance.yahoo.com/news/bitcoin-bounces-chain-data-point-065218483.html