1 Soaring Stock to Hold for the Next 20 Years

In the ever-evolving landscape of the stock market, identifying a company with the potential to soar over the next two decades is akin to finding a needle in a haystack. However, one stock stands out as a beacon of long-term growth potential: Taiwan Semiconductor Manufacturing (TSM). This company, the world’s largest dedicated contract chip manufacturer, has a market share of almost 60% and is poised to benefit from the growth of artificial intelligence, the Internet of Things, and high-performance computing applications. These trends are expected to last for decades, making TSM a compelling investment for the long haul.



Why Taiwan Semiconductor Manufacturing?

1. Market Leadership and Innovation: Taiwan Semiconductor is at the forefront of semiconductor technology, with a disciplined approach to capital spending that reduces risks of oversupply. This strategy allows the company to invest in cutting-edge research, maintaining its leadership in the industry. As of March 13, 2025, TSM stock trades 37% below Morningstar’s fair value estimate of $273 per share, indicating significant growth potential.

2. Long-Term Economic Trends: The growth of AI, IoT, and high-performance computing applications is expected to last for decades. Taiwan Semiconductor is well-positioned to capitalize on these trends, making it a strong candidate for long-term growth. The company's focus on innovation and market leadership positions it well for sustained growth.

3. Strong Financials and Capital Allocation: Taiwan Semiconductor has a history of smart capital allocation decisions, which has delivered a durable cost advantage for its business. The company's strong financials and predictable cash flows make it a reliable investment for the long term.

4. Economic Moat: Taiwan Semiconductor has a wide Morningstar Economic Moat Rating, which protects it from competition. This economic moat, combined with the company's strong financials and capital allocation, makes it a resilient investment for the long term.

5. Valuation: Taiwan Semiconductor stock is trading 37% below its fair value estimate of $273 per share, making it an attractive long-term investment. The company's strong fundamentals and growth potential make it a compelling investment for the next 20 years.

Historical Performance and Future Outlook



Tesla's stock price more than doubled in 2023, highlighting the potential for significant growth in the tech sector. Similarly, Taiwan Semiconductor's focus on innovation and market leadership positions it well for sustained growth. The company's strong fundamentals and growth potential make it a compelling investment for the next 20 years.

Conclusion

In conclusion, Taiwan Semiconductor Manufacturing is a soaring stock to hold for the next 20 years. The company's market leadership, innovation, strong financials, economic moat, and attractive valuation make it a compelling investment for the long term. As the growth of AI, IoT, and high-performance computing applications continues to drive demand for semiconductors, Taiwan Semiconductor is well-positioned to capitalize on these trends and achieve sustained growth. Investors looking for a long-term growth opportunity should consider adding Taiwan Semiconductor Manufacturing to their portfolios.