One of the Best AI Stocks Now: Why TSMC Belongs on Your Buy List
AI runs on compute, and compute runs on chips. Nvidia and AMD design them. Taiwan Semiconductor Manufacturing (NYSE: TSM) builds them at scale. If you want exposure to the AI buildout without paying designer-level multiples, TSMC is a clean way to play the picks-and-shovels side.
Why TSMC matters for AI
TSMC is the leading foundry for advanced chips used in AI, manufacturing high-performance processors for customers like Nvidia and AMD. That position has turned into real results as demand for AI training and inference has surged.
Recent numbers
In the third quarter, TSMC posted revenue of 989.9 billion New Taiwan dollars (about $33.1 billion), up 30% year over year. Diluted EPS climbed 39% to NT$17.44 (roughly $2.92). Earnings growth has rewarded shareholders over the past few years as AI orders scaled.
Capacity build-out to meet demand
Customer demand is strong enough that TSMC is expanding hard. The company is building three new U.S. fabs, plus advanced packaging and R&D facilities, representing roughly $165 billion in investment. This adds needed capacity for advanced nodes and packaging that AI workloads depend on.
For official updates and filings, see TSMC investor relations.
Valuation vs. peers
TSMC trades at a lower price-to-earnings multiple than Nvidia and AMD. P/E isn't the whole story, but a discount on the core manufacturer behind AI compute is hard to ignore-especially with growth, scale, and capital commitments lining up.
What finance pros should watch
- Capacity execution: Ramp timing for new U.S. fabs and advanced packaging throughput.
- Customer mix: Concentration with top AI customers (e.g., Nvidia, AMD) and the durability of orders.
- Node leadership: Progress on next-gen process technologies that keep AI chips efficient and cost-effective.
- Margins vs. capex: How pricing and utilization offset a heavy investment cycle.
Bottom line
TSMC sits at the center of AI infrastructure. You get scale, earnings momentum, and a more accessible multiple than the headline chip designers. For long-term investors who want direct exposure to AI demand without paying top-shelf valuations, TSMC makes a strong case.
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