The emergence of new technologies has put a strain on chip production
The shares of Taiwan Semiconductor Mfg. Co. Ltd. (NYSE:TSM) are up 3% ahead of the opening bell, last seen trading at $121.80, after the company announced a big investment move to help deal with the global chip shortage. Specifically, the semiconductor maker said it will invest $100 billion over the next three years to increase its production in order to meet the surging demand from new technologies.
On the charts, the shares have taken an extended breather after hitting an all-time high of $142.20 on Feb. 16, though the stock looks to have staged a bounce off the 120-day moving average. Today the security is set to reclaim its 30-day moving average for the first time since late-February. Plus, the equity still sports an impressive year-over-year lead of 147.5%.
Analysts, meanwhile, are extremely bullish on Taiwan Semiconductor stock. Of the six in coverage, five rate the equity a "strong buy," while one lone wolf recommends a "strong sell." Plus, the consensus 12-month target price of $134.46 is a 10.6% premium to last night's close.
Lastly, the security's Schaeffer's Volatility Scorecard (SVS) ranks at an extremely high 94 out of 100. This means TSM has exceeded volatility expectations during the past year -- a boon for premium buyers.