The future trajectory of TSMC's stock price does not solely rely on EPS but rather on its price-to-earning ratio (P/E). This ratio is influenced by economic conditions, geopolitical responses, and the company's ability to maintain its leadership position. Following a series of negative news from the Trump administration regarding high tariffs and semiconductor taxes, TSMC put forth a solid performance during its earnings conference on April 17, announcing a 60% rise in net profit and projecting a revenue growth of 24% to 26% for the year.

Despite these promising results, both the TSMC stocks trading in Taiwan and its ADRs in the U.S. showed only slight gains after the earnings call, overshadowed by multiple foreign institutions lowering their target prices. Investor uncertainty persists. TSMC's chairman, Dr. C. C. Wei, responded to questions cautiously, signaling that regardless of the positive earnings outlook, the ultimate concern lies in Trump’s tariff policies. The potential for new tariffs based on semiconductor imports remains problematic for TSMC and its supply chain.

As TSMC embarks on a significant investment of $100 billion in the U.S., considerations of how this affects its margins and overall business strategy become pertinent. Notably, TSMC's leading technology positions it ahead of competitors such as Intel and Samsung, who may need several years to catch up. Given this market landscape, the crux of the matter lies in how the market will respond to TSMC's pricing relative to its earnings forecasts.