Laffont Shifts Portfolio Focus to AI Supply Chain
Written by Emily J. Thompson, Senior Investment Analyst
Updated: May 23 2026
0mins
Source: NASDAQ.COM
- Portfolio Adjustment: Laffont significantly reshuffled his portfolio last quarter by selling eight of his top ten holdings, indicating a preference for upstream AI computing companies, particularly increasing stakes in Taiwan Semiconductor and Lam Research, reflecting confidence in future market demand.
- Rising Capital Expenditures: Microsoft expects its capital expenditures to reach $190 billion in 2023, with other hyperscalers also increasing budgets, creating substantial opportunities for manufacturing companies like TSMC and Lam Research, driving revenue and margin growth.
- Market Performance Discrepancy: Despite Lam Research's stock rising nearly 60% this year, its P/E ratio has surged from 30 to 48, indicating that the market has already priced in strong future earnings, which may lead Laffont to take profits this quarter.
- Attractiveness of TSMC: While TSMC's P/E has also increased, it remains at 25, lower than its peers, and combined with its strong medium-term outlook, makes it a key asset in Laffont's portfolio, warranting investor attention.
Trade with 70% Backtested Accuracy
Stop guessing "Should I Buy TSM?" and start using high-conviction signals backed by rigorous historical data.
Sign up today to access powerful investing tools and make smarter, data-driven decisions.
Analyst Views on TSM
Wall Street analysts forecast TSM stock price to fall
8 Analyst Rating
7 Buy
1 Hold
0 Sell
Strong Buy
Current: 424.860
Low
63.24
Averages
313.46
High
390.00
Current: 424.860
Low
63.24
Averages
313.46
High
390.00
About TSM
Taiwan Semiconductor Manufacturing Co Ltd is a Taiwan-based integrated circuit foundry service provider. The Company is primarily engaged in integrated circuit manufacturing services. It offers advanced process technologies, specialised process solutions, advanced photomask and silicon stacking, and packaging-related technologies, while supporting a comprehensive design ecosystem. The Company's products serve diverse electronic sectors including artificial intelligence, high-performance computing, wired and wireless communications, automotive and industrial equipment, personal computing, information applications, consumer electronics, smart internet of things, and wearable devices.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Investment Opportunities Amid Market Downturns
- Market Downturn Opportunities: During market downturns, many large tech stocks saw valuations drop to recent lows, with investors buying back in March, leading to a 24.7% rise in the Nasdaq Composite and a 15.9% increase in the S&P 500 since April 1, both hitting new highs.
- Valuation Spike Risks: The Shiller P/E ratio has surged to 42 due to the recent rally, nearing levels last seen before the 1999 market crash, indicating potential risks of another downturn, which investors should monitor closely.
- TSMC Market Dominance: Taiwan Semiconductor Manufacturing Company (TSMC) controls 72% of the global foundry market and over 90% of the advanced chip market, leveraging its scale and technological advantages to maintain a strong competitive edge.
- Strong Return Performance: TSMC has risen 40% year-to-date and 119% over the past 12 months, averaging a 33% annualized return, indicating robust performance in the tech sector, making it a potential buy during market corrections.
See More
AI Drives Strong Growth for Lumentum and Applied Materials
- Lumentum Performance Surge: In the first nine months of fiscal 2026, Lumentum's revenue soared 72% year-over-year to over $2 billion, with current quarter revenue expected to exceed $985 million, indicating sustained AI-driven demand that strengthens its leadership in the photonics market.
- Significant Profitability Boost: Lumentum's earnings per share increased 4.5 times year-over-year to $5.27 in the first nine months of fiscal 2026, with robust revenue growth poised to enhance profitability, justifying its high 56 times P/E ratio as investors consider entry points.
- Applied Materials Growth Acceleration: Applied Materials reported an 11% year-over-year revenue increase to $7.91 billion in Q2 of fiscal 2026, with current quarter revenue projected to reach $8.95 billion, reflecting a strong 23% year-over-year growth driven by robust AI chip demand.
- Optimistic Market Outlook: Applied Materials anticipates over 30% growth in its semiconductor equipment business in 2026, bolstered by partnerships with industry leaders to develop AI-focused equipment, leading analysts to significantly raise earnings expectations and reflect strong market confidence.
See More
Lumentum and Applied Materials Show Strong Growth Amid AI Demand
- Lumentum Revenue Surge: Lumentum's revenue increased by 72% year-over-year in the first nine months of fiscal 2026, surpassing $2 billion, with current quarter guidance suggesting revenue could double to $985 million from $480.7 million last year, indicating robust demand driven by AI infrastructure.
- Profitability Enhancement: Lumentum's earnings per share soared 4.5 times year-over-year to $5.27 in the first nine months of fiscal 2026, reflecting high margins from its data center products and signaling sustained profitability growth ahead.
- Applied Materials Performance Recovery: Applied Materials reported an 11% year-over-year revenue increase in Q2 2026, reaching $7.91 billion, with earnings per share rising 20% to $2.86, showcasing a strong rebound in the semiconductor equipment market.
- Future Growth Outlook: The company anticipates $8.95 billion in revenue for the current quarter, a 23% increase, with earnings expected to grow by 36%, and forecasts over 30% growth in its semiconductor equipment business in 2026, solidifying its market position.
See More
Elwood Capital Fully Exits Wix.com Position
- Liquidation Trade: Elwood Capital disclosed in an SEC filing that it fully liquidated its 52,033 shares in Wix.com during Q1 2026, with an estimated trade value of $4.35 million, reflecting a pessimistic outlook on the company's future performance.
- Position Change: This transaction reduced Elwood's stake in Wix.com from 3.2% to zero, with a net position change of $5.41 million, indicating concerns over market volatility and the company's profitability.
- Performance Metrics: Despite Wix.com reporting a 14% year-over-year revenue increase to $541 million in Q1 and achieving an annual recurring revenue of $1.9 billion, it still posted a GAAP net loss of $57.5 million, highlighting ongoing profitability challenges.
- Market Reaction: Wix.com's stock price has plummeted 63% over the past year, significantly underperforming the S&P 500's 28% gain, which may dampen investor confidence further, and Elwood's exit could exacerbate negative sentiment around the stock.
See More
TSMC's Dominance in the Semiconductor Market
- Market Leadership: TSMC has achieved a near-monopoly in the semiconductor industry through its advanced chip manufacturing technology and scale, relying on all logic chip designers, ensuring the company continues to benefit amid growing demand for AI accelerators and CPUs.
- Significant Investment Returns: Glen Kacher, founder of Light Street Capital, has demonstrated outstanding performance over the past three years, with his fund generating returns of 45.7%, 59.4%, and 37.3% in 2023, 2024, and 2025 respectively, showcasing the success of his investment strategy in the semiconductor sector.
- Custom Chip Market Potential: Broadcom shows immense growth potential in its custom AI chip business, with projected revenues exceeding $100 billion by fiscal 2027, while analysts forecast AI revenues to reach $180 billion by fiscal 2028, reflecting strong demand in the data center market.
- AMD's Growth Opportunities: AMD is poised to capitalize on the growth of agentic AI and inference markets through its chip design, with two contracts worth approximately $100 billion each, further solidifying its leadership in the data center CPU market and showcasing robust growth prospects.
See More
Light Street Capital's Semiconductor Investment Strategy
- Remarkable Returns: Glen Kacher of Light Street Capital has demonstrated exceptional performance over the past three years, achieving returns of 45.7%, 59.4%, and 37.3% in 2023, 2024, and 2025 respectively, showcasing his strong capabilities in tech investing and attracting significant market attention.
- Core Position in TSMC: Kacher's allocation of 14.4% of his portfolio to Taiwan Semiconductor Manufacturing, his largest holding, reflects confidence in the company's monopoly in advanced chip manufacturing, which is expected to benefit from the ongoing demand for AI and other chips.
- Market Leadership of Nvidia: Nvidia represents 8.9% of Light Street's holdings, and its dominant position in the large language model training market, coupled with a strong data center networking portfolio, positions it for significant growth in AI infrastructure, particularly in inference and agentic AI markets.
- Growth Potential of Broadcom: Broadcom, accounting for 8.7% of Light Street's portfolio, is expected to exceed $100 billion in custom AI chip revenues by fiscal 2027, highlighting its robust growth potential in the data center market, especially through its collaboration with Alphabet.
See More
Investment Opportunities Amid Market Downturns
- Market Downturn Opportunities: During market downturns, many large tech stocks saw valuations drop to recent lows, with investors buying back in March, leading to a 24.7% rise in the Nasdaq Composite and a 15.9% increase in the S&P 500 since April 1, both hitting new highs.
- Valuation Spike Risks: The Shiller P/E ratio has surged to 42 due to the recent rally, nearing levels last seen before the 1999 market crash, indicating potential risks of another downturn, which investors should monitor closely.
- TSMC Market Dominance: Taiwan Semiconductor Manufacturing Company (TSMC) controls 72% of the global foundry market and over 90% of the advanced chip market, leveraging its scale and technological advantages to maintain a strong competitive edge.
- Strong Return Performance: TSMC has risen 40% year-to-date and 119% over the past 12 months, averaging a 33% annualized return, indicating robust performance in the tech sector, making it a potential buy during market corrections.
See More
AI Drives Strong Growth for Lumentum and Applied Materials
- Lumentum Performance Surge: In the first nine months of fiscal 2026, Lumentum's revenue soared 72% year-over-year to over $2 billion, with current quarter revenue expected to exceed $985 million, indicating sustained AI-driven demand that strengthens its leadership in the photonics market.
- Significant Profitability Boost: Lumentum's earnings per share increased 4.5 times year-over-year to $5.27 in the first nine months of fiscal 2026, with robust revenue growth poised to enhance profitability, justifying its high 56 times P/E ratio as investors consider entry points.
- Applied Materials Growth Acceleration: Applied Materials reported an 11% year-over-year revenue increase to $7.91 billion in Q2 of fiscal 2026, with current quarter revenue projected to reach $8.95 billion, reflecting a strong 23% year-over-year growth driven by robust AI chip demand.
- Optimistic Market Outlook: Applied Materials anticipates over 30% growth in its semiconductor equipment business in 2026, bolstered by partnerships with industry leaders to develop AI-focused equipment, leading analysts to significantly raise earnings expectations and reflect strong market confidence.
See More
Lumentum and Applied Materials Show Strong Growth Amid AI Demand
- Lumentum Revenue Surge: Lumentum's revenue increased by 72% year-over-year in the first nine months of fiscal 2026, surpassing $2 billion, with current quarter guidance suggesting revenue could double to $985 million from $480.7 million last year, indicating robust demand driven by AI infrastructure.
- Profitability Enhancement: Lumentum's earnings per share soared 4.5 times year-over-year to $5.27 in the first nine months of fiscal 2026, reflecting high margins from its data center products and signaling sustained profitability growth ahead.
- Applied Materials Performance Recovery: Applied Materials reported an 11% year-over-year revenue increase in Q2 2026, reaching $7.91 billion, with earnings per share rising 20% to $2.86, showcasing a strong rebound in the semiconductor equipment market.
- Future Growth Outlook: The company anticipates $8.95 billion in revenue for the current quarter, a 23% increase, with earnings expected to grow by 36%, and forecasts over 30% growth in its semiconductor equipment business in 2026, solidifying its market position.
See More
Elwood Capital Fully Exits Wix.com Position
- Liquidation Trade: Elwood Capital disclosed in an SEC filing that it fully liquidated its 52,033 shares in Wix.com during Q1 2026, with an estimated trade value of $4.35 million, reflecting a pessimistic outlook on the company's future performance.
- Position Change: This transaction reduced Elwood's stake in Wix.com from 3.2% to zero, with a net position change of $5.41 million, indicating concerns over market volatility and the company's profitability.
- Performance Metrics: Despite Wix.com reporting a 14% year-over-year revenue increase to $541 million in Q1 and achieving an annual recurring revenue of $1.9 billion, it still posted a GAAP net loss of $57.5 million, highlighting ongoing profitability challenges.
- Market Reaction: Wix.com's stock price has plummeted 63% over the past year, significantly underperforming the S&P 500's 28% gain, which may dampen investor confidence further, and Elwood's exit could exacerbate negative sentiment around the stock.
See More
TSMC's Dominance in the Semiconductor Market
- Market Leadership: TSMC has achieved a near-monopoly in the semiconductor industry through its advanced chip manufacturing technology and scale, relying on all logic chip designers, ensuring the company continues to benefit amid growing demand for AI accelerators and CPUs.
- Significant Investment Returns: Glen Kacher, founder of Light Street Capital, has demonstrated outstanding performance over the past three years, with his fund generating returns of 45.7%, 59.4%, and 37.3% in 2023, 2024, and 2025 respectively, showcasing the success of his investment strategy in the semiconductor sector.
- Custom Chip Market Potential: Broadcom shows immense growth potential in its custom AI chip business, with projected revenues exceeding $100 billion by fiscal 2027, while analysts forecast AI revenues to reach $180 billion by fiscal 2028, reflecting strong demand in the data center market.
- AMD's Growth Opportunities: AMD is poised to capitalize on the growth of agentic AI and inference markets through its chip design, with two contracts worth approximately $100 billion each, further solidifying its leadership in the data center CPU market and showcasing robust growth prospects.
See More
Light Street Capital's Semiconductor Investment Strategy
- Remarkable Returns: Glen Kacher of Light Street Capital has demonstrated exceptional performance over the past three years, achieving returns of 45.7%, 59.4%, and 37.3% in 2023, 2024, and 2025 respectively, showcasing his strong capabilities in tech investing and attracting significant market attention.
- Core Position in TSMC: Kacher's allocation of 14.4% of his portfolio to Taiwan Semiconductor Manufacturing, his largest holding, reflects confidence in the company's monopoly in advanced chip manufacturing, which is expected to benefit from the ongoing demand for AI and other chips.
- Market Leadership of Nvidia: Nvidia represents 8.9% of Light Street's holdings, and its dominant position in the large language model training market, coupled with a strong data center networking portfolio, positions it for significant growth in AI infrastructure, particularly in inference and agentic AI markets.
- Growth Potential of Broadcom: Broadcom, accounting for 8.7% of Light Street's portfolio, is expected to exceed $100 billion in custom AI chip revenues by fiscal 2027, highlighting its robust growth potential in the data center market, especially through its collaboration with Alphabet.
See More
