-
The role of artificial intelligence (AI) in the semiconductor industry is expected to rise significantly in the coming years.
-
Taiwan’s semiconductor manufacturing industry is a key partner for chip manufacturers as they rely on the company’s casting services.
-
Although the growth prospects for the Taiwan semi-finals look bright, the stock's trading volume is at a historically cheap valuation.
On November 30, 2022, the launch of Chatgpt is one of the main catalysts that triggered the artificial intelligence (AI) revolution. Since that date, shares of semiconductor stocks Nvidia In the process, the company soared 550%, turning the company into a multi-trillion dollar business. While semiconductor chips should remain an integral part of AI development, investors want to identify new growth opportunities outside NVIDIA.
Taiwan Semiconductor Manufacturing (NYSE: TSM) It is another company that looks likely to dominate the AI chip field for the next decade. Its growth prospects and valuation trends support why Taiwan’s halftime is now my best choice in the chip space right now.
Where to invest $1,000 now? Our team of analysts just revealed what they think is 10 Best Stocks Buy it now. continue"
You'll probably be familiar with names like Nvidia, Advanced Micro Devicesand Broadcom About advanced chipset and data center infrastructure for building AI applications. However, what you may not be familiar with is the role played in the backstage of the Taiwan semi-finals.
Nvidia, AMD, Broadcom, Openai, Amazon,,,,, Qualcommmany others rely on the manufacturing process of TSMC to help make their chips and integrated system products. In other words, the Taiwan semi-finals brought the engineering capabilities of the largest AI player into life.
In 2024, TSMC generated $88.3 billion in sales and earnings per share of $6.81. According to the consensus estimate below, Wall Street expects the company's highest line to grow rapidly over the next few years while also maintaining healthy profitability.
According to PreceDedence Research, AI in the semiconductor market is expected to reach a market size of US$233 billion by 2034. Given that TSMC already holds more than 60% of the foundry market, coupled with its long roster of industry-leading chip designers and the rise of custom silicon chipsets, the rise of the Taiwanese semi-finals can achieve even more than the financial estimates stated above.
As of this writing, the price ratio (P/E) for the semi-trading in Taiwan is 21. This is consistent with its 10-year average multiple.
However, TSMC's valuation has been significantly compressed over the past few months, mainly due to the ongoing uncertainty of new U.S. tariffs and trade policies
While it's hard to predict when any relief will be taken from ongoing trade negotiations, I tend to think that growth stocks are now oversold in the camp. From a macro perspective, tariffs can be changed at any time, and current policies will not last forever. Investors have exaggerated the impact of tariffs on TSMC's business in the short term, while underestimating the bright future of the company's long-term opportunities.
Unlike investments in NVIDIA, buying TSMC stock is more or less a long-term bet on overall chip demand and AI infrastructure spending. In other words, TSMC will benefit regardless of the company's demand for chips or data center devices.
This puts the company in the middle of a big big trend that is emerging. Taiwan's semi-finals' growth prospects are at least the best in the past decade, but the company's valuation has not changed from the 10-year average and even represents a discount S&P 500 index.
Putting everything together, you have a clear case of why Taiwan Semi is the top bargaining stock to have in the next decade.
Before you buy stocks at a Taiwanese semiconductor manufacturer, consider the following:
this Motley Fool Stock Advisor The analyst team just confirmed what they think is 10 Best Stocks For investors, buy now... and Taiwan's semiconductor manufacturing industry is not one of them. Ten stocks with layoffs could generate monster returns in the coming years.
When to consider Netflix On this list on December 17, 2004...If you invested $1,000 when you suggested, You will have $623,685! * Or when Nvidia This list was listed on April 15, 2005...If you invested $1,000 when you suggested, You will have $701,781! *
Now, it's worth noting Stock ConsultantThe overall average return is 906% - Compared to market sprints 164% For the S&P 500 index. Don't miss the latest top ten list, available when you join Stock Consultant.
View 10 stocks »
*Stock consultant returns as of April 28, 2025
John Mackey, former CEO of Amazon's subsidiary Whole Foods Market, is a member of the board of directors of Motley Fool. Adam Spatacco has positions at Amazon and NVIDIA. Motley Fool has a place in Amazon, Nvidia, Qualcomm and Taiwan’s semiconductor manufacturing industries and recommends advanced micro devices. Motley Fool recommends Broadcom. Motley Fool has a disclosure policy.
Forecast: This will be the best performing semiconductor stock in the next 10 years (tip: not Nvidia) was originally published by Motley Fool