The stock market is not the economy. However, many trends can play out with exaggerated moves both up and down in the stock market. That’s especially true with tech trends. While technology continues to transform, how investors view the investment opportunities can rapidly change.
That can create times when it’s wise to step aside, as values are too high. At other times, it may make sense to buy, even when things look ugly. That latter case may be playing out today…
The top play for most tech trends comes down to semiconductors. These chips power all of today’s technological tools, and key software trends can’t run without chips either.
Taiwan Semiconductor Manufacturing (TSM) recently came out with the view that the sector will turn around in the second half of 2023. That may be a bit early, but the manufacturer of semiconductors is in the best spot to know.
It also doesn’t hurt that the company reported better-than-expected earnings in its most recent quarter.
Action to take: Shares of TSM are inexpensive at 13 times earnings, a 48 percent growth rate, and a 43 percent profit margin. They’re a global leader in the actual manufacturing of semiconductors, and are expanding their global locations. Shares also yield 2.3 percent.
For traders, the June $100 calls, last going for about $2.90, offer mid-to-high double-digit returns in the coming months.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.