Finding deals after a sell-off is a great way to make a profit as an investor. Many stocks are currently trading for an absurdly low valuation, even after the bump that stocks got on Wednesday.
Two that look like screaming buys right now are Taiwan Semiconductor Manufacturing (NYSE: TSM) and Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL). Each of these stocks is so cheap right now that investors cannot afford to miss out on the deals the market is offering.
At first glance, Taiwan Semiconductor appears to be an odd pick. President Donald Trump specifically targeted Taiwan with a 32% tariff rate, which could hurt Taiwan Semi since most of the chips it makes are produced in Taiwan. That rate has now dropped to 10% to all countries across the board. However, that ignores a huge piece of information in the tariffs: Semiconductors are exempt. This is a key point that many investors are missing, making Taiwan Semi an intriguing buy right now.
Another factor that could keep Taiwan Semiconductor off of Trump’s list of targeted companies is that it’s actively working to build new production facilities in the U.S. TSMC recently announced a $100 billion investment in U.S. chip manufacturing facilities, which will include three fabrication facilities, two packaging centers, and one research and development (R&D) facility. That’s big news for TSMC, and it’s exactly what Trump wants: to move more manufacturing capabilities inside the U.S.
Still, there’s fear that a weaker consumer could hurt TSMC’s business, as some of its chips are used in consumer-facing products like smartphones or vehicles. While this demand will likely dip, it’s bound to be outweighed by massive growth in AI chip demand. Over the next five years, management projects that artificial intelligence (AI)-related revenue will increase at a 45% compound annual growth rate (CAGR). Overall, it expects its total revenue to grow at a 20% CAGR, indicating that the company will be fine.
Investors will hear more commentary on how tariffs will affect Taiwan Semi’s demand during its Q1 conference call on April 17, but there’s no reason to doubt the stock as much as the market does right now. Following the sell-off, Taiwan Semi’s stock now trades for less than 18 times forward earnings.
That’s an incredibly cheap price for one of the world’s most important companies, especially when you consider its growth and ability to sidestep tariffs. With how cheap the stock is right now, I think it’s one that investors can’t afford to miss out on, and they should be buying up shares left and right at today’s prices.
