Is Taiwan Semiconductor Manufacturing (TSM) Among The Top Goldman Sachs Value Stocks?

Insider Monkey
15 Apr

We recently published a list of Goldman Sachs Value Stocks: Top 12 Stock Picks. In this article, we are going to take a look at where Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) stands against other Goldman Sachs value stocks to invest in.

As we recently discussed in another article, growth stocks are massively overvalued and trading at significant premiums, which is why investment firms advise investors to concentrate on value stocks. Near the end of March 2025, artificial intelligence stocks that had taken the market over by storm faced losses, while undervalued stocks gained momentum. Similarly, hedge fund managers believe that now is the time to invest in value stocks, with cheap equities available across all industries. Banks, energy, consumer durables, healthcare, and media companies offer lucrative investment opportunities.

So, what is value investing? Matthew Fine, portfolio manager at Third Avenue Management, describes it as identifying companies trading at a notable discount to a conservative estimate of their true value. These opportunities often arise when a business, industry, or region faces challenges that cause investors to overreact and assume current difficulties will persist long-term. This pessimism creates chances to invest at attractive valuations. While broader equity markets currently appear overvalued, largely driven by the United States, Third Avenue sees overlooked value in many individual companies. Despite a rocky economy, the fund manager believes many quality businesses have become even cheaper, offering compelling opportunities for patient investors. However, the key is to avoid buying a company that seems cheap just because it has temporary advantages that might not last.

Warren Buffett is the king of value investing, and back in 2023, he commented in his annual shareholder meeting that “what gives you opportunities is other people doing dumb things”. Buffett’s Berkshire picks up stocks when others are panic-selling their holdings, and although the Oracle of Omaha understands that the world is rapidly changing, he still sees several value investing opportunities.

Overall, the stock market is in mayhem because of the uncertainty brought on by US trade wars and tariffs. However, institutional investors like Goldman Sachs align with the market perspective and have a thriving $634 billion portfolio. So, let’s take a look at the top Goldman Sachs value stocks.

A close-up of a complex network of integrated circuits used in logic semiconductors.

Our Methodology 

To compile our list of Goldman Sachs' top value stock picks, we searched the investment firm’s Q4 2024 portfolio, starting from the top and assessing the PE ratios as of April 11. From there, we chose the top 12 stocks with PE ratios of 25 or under as Goldman Sachs' value picks. We have also mentioned the Q4 2024 hedge fund sentiment around the holdings for further insight. The list is ranked in ascending order of Goldman Sachs’ stake value.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)

Goldman Sachs' Q4 2024 Stake Value: $2,183,461,911

P/E Ratio as of April 11: 20.76

Number of Hedge Fund Holders: 186

Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is the largest semiconductor firm in the world. As of the fourth quarter of 2024, Goldman Sachs held a significant position in TSM, with 11.05 million shares worth $2.18 billion. On April 10, investment advisory Bernstein maintained an Outperform rating on TSM with a price target of $251. The company kicked off 2025 strong, reporting Q1 revenue that topped expectations and came in near the high end of its guidance.

On February 14, Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) declared a $0.6855 per share quarterly dividend. The dividend is set to be paid on July 10, to shareholders listed by June 12.

TSM announced on March 4 that it is spending an extra $100 billion to grow its chip-making business in the US, bringing its total investment to $165 billion. This is the biggest investment ever made in the US by a foreign company. The plan includes building three new factories, two packaging centers, and a big research center in Arizona. This move will create thousands of high-paying tech jobs, boost AI innovation, and help build a stronger US semiconductor supply chain.

Among the hedge funds tracked by Insider Monkey, 186 funds held stakes in Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) at the end of Q4 2024, compared to 158 funds in the prior quarter. Ken Fisher’s Fisher Asset Management was the biggest position holder in the company, with 28.35 million shares valued at nearly $5.6 billion.

Overall, TSM ranks 9th among the Goldman Sachs Value Stocks: Top 12 Stock Picks. While we acknowledge the potential of value stocks, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than TSM but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.

Disclosure: None. This article is originally published at Insider Monkey.

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

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