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The artificial intelligence (AI) revolution is quietly progressing in the background as traders study all the tariff-related tweets from President Trump. AI tools change the way users search, research and code, while businesses embed AI into their everyday workflows. To take advantage of this powerful trend, the inventory you are considering purchasing today is Taiwan Semiconductors Manufacturing company (NYSE:TSM).
TSMC is the world’s leading PurePlay Semiconductor Foundry, as the company is known. In other words, you’re building chips for others, not for themselves. The list of customers is who is who in the technology world – apple, nvidia, AMD, QualcommGoogle, and even Tesla Everything relies heavily on TSMC to manufacture the most advanced chips.
This means that the company manages a significant majority of the world’s AI chip manufacturing.
Incredible growth
This competitiveness was seen on the show in the first quarter. Revenue jumped to 41.6% (ignoring currency movements), bringing it to $25.5 billion as demand for AI-related chips easily offset the weakness in other regions (such as smartphones). Net income rose 60.3% to over $1.1 billion, representing an incredible 43% net profit.
For the full year, management expects revenue to increase in mid-term. Looking further into 2029, TSMC believes annual growth rates for the combined revenue year are approaching 20%. For an already large company, it is a very impressive growth.
However, one of the uncertainties here is global trade tensions, which could lead to a slower demand. The company says it has not seen evidence of this before, but it is a potential issue that will move forward.
Another risk that is often highlighted in stocks is the possibility that China will suddenly invade Taiwan. Again, this cannot be ruled out, but I think most portfolios would crush it if it was as serious as this happened. I hope that’s not the case.
To diversify its global footprint, TSMC has spent $165 billion to set US manufacturing to “.Promoting the future of AI“We’ve also opened a new fab in Japan and built one in Germany. This reduces the risk of all chip production occurring on Taiwan Island.
Reasonable price growth
It is worth mentioning that currently TSMC’s US registered stocks are unfortunately not eligible to hold in the stock and shares ISA. However, they can be purchased with a general trading account or in a self-invested personal pension (I own some with my SIPP).
The stock has fallen 13% since January. And at $195, the stock is trading at 20x advance revenue.
Upgrade cycle
To stay ahead of the curve, TSMC is set up to begin production of state-of-the-art 2NM and 1.6nm process technologies between 2025 and late 2026, respectively. These can produce faster, more energy-efficient chips and lead to new upgrade cycles across the high-tech industry.
We hope that in the future, TSMC will remain at the heart of many powerful technology trends. From AI data centers and VR headsets to electric cars and unmanned taxis, all of the advanced chips are required.
The stocks represent high quality growth at very reasonable prices, which I think is worth considering.