CAT vs TSM: Which Is the Better Buy?
Side-by-side comparison of Caterpillar Inc. and Taiwan Semiconductor Manufacturing Company Limited — fair value, conviction, valuation metrics, and QuantHub research signals.
Updated 2026-04-10.
Caterpillar Inc. · Industrials
$792.65
-8.8% upside to fair value
Grade D
VS
Taiwan Semiconductor Manufacturing Company Limited · Technology
$365.90
-3.8% upside to fair value
Med Conviction
Grade B+
QuantHub Verdict
TSM has more upside to fair value
(-3.8%).
TSM trades at a lower forward P/E
(26.0x).
These are model outputs — not personalized investment advice.
See all research →
Valuation & Fundamentals
| Metric |
CAT |
TSM |
| Current Price |
$792.65 |
$365.90 |
| Fair Value Estimate |
$723.13 |
$352.00 |
| Upside to Fair Value |
-8.8%
|
-3.8%
|
| Market Cap |
$370.9B |
$1,897.7B |
| Forward P/E |
41.7x
|
26.0x
|
| EV / EBITDA |
27.2x
|
18.1x
|
| Price / Sales |
5.5x
|
13.3x
|
| Price / FCF |
36.1x
|
54.0x
|
| Revenue Growth YoY |
+8.5%
|
+33.0%
|
| Gross Margin |
32.3%
|
59.9%
|
| Operating Margin |
16.6%
|
50.8%
|
| Return on Equity |
45.1%
|
35.1%
|
| Dividend Yield |
0% |
1.05% |
| FCF Yield |
2.77%
|
1.85%
|
| Analyst Consensus |
Buy
|
Strong Buy
|
Investment Thesis
Caterpillar Inc. is the world's leading manufacturer of construction and mining equipment, engines, and industrial machinery, with a strong global footprint and a record $67.6 billion in revenues for 2025. The company benefits from a durable competitive position supported by a broad product portfolio and a large installed base, but faces margin pressure from tariffs and cost inflation. Despite so…
TSMC remains the single most critical company in the global semiconductor supply chain, manufacturing virtually every leading-edge AI chip for NVIDIA, Apple, AMD, and the hyperscalers. The company delivered exceptional 2025 results with 33% revenue growth and 50% net income growth, driven by HPC surging to 55% of Q4 revenue. At the 3nm node, TSMC maintains production yields of 70-80% versus Samsu…
Accumulation Zones
| Metric |
CAT |
TSM |
| Zone Low |
$542.35 |
$265.00 |
| Zone High |
$614.66 |
$310.00 |
| In Buy Zone? |
No
|
No
|