Strike Techs After the Dip

The following basket contains only two companies from the technology sector. TSM is one of the major companies in the sector which provides semiconductors to the key technology companies in the world. SK Hynix is one of the few players that manufactures memory semiconductors.

Both companies could be considered as top technology companies that should benefit from AI implementation.

Even though we see that US midterm elections were won by Democrats we still expect in the long run AI integration in various industries and do not consider serious changes in the industry. After last week emotional sell off we assume that 70% capital barrier levels for these two names are more than attractive.

SK Hynix Inc. [Internal score 83/100], based in South Korea, is the world’s second-largest manufacturer of memory semiconductors, trailing only Samsung Electronics. The main part of its revenue (70%) is derived from the sale of DRAM memory chips. The remainder comes from NAND flash memory chips (25%) and ultra-high-capacity enterprise SSDs designed for data centers. Furthermore, SK Hynix has become a key technology partner for NVIDIA, supplying HBM3 and HBM3e memory chips. The company currently holds more than a 50% share of the global HBM market.

According to the recent financial report adj. revenue of the company increased more than three times y-o-y and exceeded $73.9B. Adj. net income for the period is equal to $27.9B comparing to $7.3B for the same period of the 2025. It is expected that for the whole 2026 revenue will exceed $263B, FCF will be positive and above $129B level.

Taiwan Semiconductor Manufacturing Company Limited [Internal score 82/100] is the world’s largest contract manufacturer of semiconductors. The company holds an absolute technological monopoly on the mass production of advanced chips. Its key clients include Apple, NVIDIA, AMD, Qualcomm, Broadcom, MediaTek, and Intel. It is also worth noting that the company is building new fabrication plants outside of Taiwan – in the United States, Japan, and Germany – thereby reducing geopolitical risks.

Adjusted revenue for the previous quarter of 2026 increased by 51% y-o-y to $46.7B, additionally, gross profit was over the level of $31.0B. For the next two quarters revenue is expected to exceed $51B. Adj. net income for the past quarter was around $23.9B vs $15.3B for the same quarter of 2025. TSM Free Cash Flow is positive and exceeds $15B.

The sell-off has created an attractive entry point, as markets have reacted sharply to US data-centre restrictions whose wider impact would take years to materialise. Meanwhile, chip demand remains strong, with SK Hynix reporting tight memory supply and major orders already secured. TSMC’s October sales on 10 November and Nvidia’s earnings on 17 November provide two near-term catalysts. Strong results could shift attention back to earnings growth and bring buyers back into chip stocks.