Taiwan Semiconductor Arbitrage Trade Faces Challenges As US Stock Premium Hits 15-Year High: 'AI Boom Is Not Over'
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jun 17 2024
0mins
Should l Buy AAPL?
Source: Benzinga
- Arbitrage Trade Dynamics: The arbitrage trade involving Taiwan Semiconductor Manufacturing Co. (TSMC) is causing unexpected pain as the U.S. stock premium over its Taiwanese counterpart reaches a 15-year high.
- Premium Discrepancy: TSMC's American depositary receipts (ADRs) are trading at a 22% premium over its Taiwan stock, the highest average since 2009, driven by the U.S.'s growing interest in artificial intelligence.
- Reasons for Premium: Accessibility of ADRs to foreign investors, inclusion in various indices, and exchange-traded products have contributed to their outperformance compared to Taiwan shares.
- AI Sector Influence: The AI sector's strength, with companies like NVIDIA, has led to continued demand for TSMC's ADRs, reflecting the rapid evolution of AI technology.
- Job Trends and Investment Opportunities: TSMC's European subsidiary plans to hire nearly 2,000 employees amid job cuts in the tech sector, while investors can access the semiconductor sector through specific ETFs.
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Analyst Views on AAPL
Wall Street analysts forecast AAPL stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for AAPL is 299.69 USD with a low forecast of 230.00 USD and a high forecast of 350.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
32 Analyst Rating
19 Buy
11 Hold
2 Sell
Moderate Buy
Current: 278.120
Low
230.00
Averages
299.69
High
350.00
Current: 278.120
Low
230.00
Averages
299.69
High
350.00
About AAPL
Apple Inc. designs, manufactures and markets smartphones, personal computers, tablets, wearables and accessories, and sells a variety of related services. Its product categories include iPhone, Mac, iPad, and Wearables, Home and Accessories. Its software platforms include iOS, iPadOS, macOS, watchOS, visionOS, and tvOS. Its services include advertising, AppleCare, cloud services, digital content and payment services. The Company operates various platforms, including the App Store, that allow customers to discover and download applications and digital content, such as books, music, video, games and podcasts. It also offers digital content through subscription-based services, including Apple Arcade, Apple Fitness+, Apple Music, Apple News+, and Apple TV+. Its products include iPhone 16 Pro, iPhone 16, iPhone 15, iPhone 14, iPhone SE, MacBook Air, MacBook Pro, iMac, Mac mini, Mac Studio, Mac Pro, iPad Pro, iPad Air, AirPods, AirPods Pro, AirPods Max, Apple TV, Apple Vision Pro and others.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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