Taiwan Semiconductor Set to Benefit from Surge in AI Spending
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Feb 21 2026
0mins
Should l Buy TSM?
Source: Fool
- AI Spending Outlook: The four major AI hyperscalers are projected to spend around $650 billion on data center capital expenditures by 2026, indicating strong AI demand, and companies not keeping pace with spending risk falling behind.
- Taiwan Semiconductor's Competitive Edge: Taiwan Semiconductor is viewed as the only company capable of standing out in the AI chip market, with clients like Nvidia, AMD, and Broadcom, ensuring its neutral position and profitability in the AI buildout.
- Revenue Growth Expectations: Management at Taiwan Semiconductor anticipates AI chip revenue to grow at nearly a 60% compound annual growth rate from 2024 to 2029, reflecting the scale and longevity of the ongoing AI buildout.
- Valuation Reasonableness: Despite the surge in AI spending, Taiwan Semiconductor's stock trades at a price-to-earnings ratio of 26, slightly above the S&P 500's 22, indicating it remains a quality investment choice.
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: 336.710
Low
63.24
Averages
313.46
High
390.00
Current: 336.710
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.
The Iran Conflict Might Disrupt AI Advancements: Here's What to Expect.
- Impact on Various Sectors: The ongoing war in Iran is expected to affect multiple sectors, including technology.
- Key Issues: Major concerns include the supply of raw materials, rising interest rates, and the potential for a cyberwar.
See More
Analysis of Steven Cohen's Investment Portfolio
- Portfolio Size: Point72 Asset Management oversees an equity portfolio valued at over $86 billion, encompassing more than 3,800 positions, which demonstrates its broad and diverse investment strategy that effectively mitigates risk while capturing market opportunities.
- Top Five Holdings: As of the latest quarter, Point72's largest stock investments include Nvidia ($1.87 billion, 2.15%), Taiwan Semiconductor ($1.41 billion, 1.63%), Amazon ($1.21 billion, 1.40%), Microsoft ($1.01 billion, 1.16%), and Arista Networks ($1.00 billion, 1.14%), indicating a significant concentration in the technology sector.
- Tech Sector Focus: While Point72's portfolio is diversified in terms of the number of holdings, it is notably concentrated in the technology sector, particularly in companies related to AI infrastructure, reflecting Cohen's emphasis on future tech trends.
- ETF Holdings: In addition to individual stocks, Point72 holds substantial ETF positions, such as the Invesco QQQ Trust, which tracks the Nasdaq-100 index, further enhancing its exposure to tech stocks and indicating confidence in the ongoing growth of the technology sector.
See More
TSMC Continues Growth Amid AI Demand, Strong Market Position
- Market Share Advantage: TSMC commands approximately 72% of the global semiconductor foundry market, and its market share exceeds 90% in advanced AI chips, providing the company with significant pricing power and competitive advantages in the industry.
- Significant Revenue Growth: TSMC is projected to achieve $122.4 billion in revenue by 2025, reflecting a nearly 36% increase from 2024, primarily driven by surging demand for AI chips in data centers and cloud infrastructure, showcasing the company's robust performance in a rapidly growing market.
- High-Performance Computing Boost: The High-Performance Computing (HPC) segment accounted for 58% of TSMC's revenue in 2025, growing 48% from 2024, indicating that AI-related products are becoming the primary growth driver for the company.
- Long-Term Investment Value: While it's uncertain whether TSMC's stock will continue to rise over the next year, trading at 24.7 times projected earnings suggests that its stock remains relatively inexpensive given its dominant position in the tech industry, making it a suitable candidate for long-term holding.
See More
TSMC Reports 36% Revenue Growth in 2025
- Significant Revenue Growth: TSMC's revenue reached $122.4 billion in 2025, marking a nearly 36% year-over-year increase, which highlights its robust performance in the global semiconductor market, particularly amid surging demand for data center chips, thereby reinforcing its market leadership.
- AI Chip Driving Growth: The High-Performance Computing (HPC) segment accounted for 58% of revenue and grew 48% from 2024, indicating that AI-related chips are becoming TSMC's new growth engine, reflecting its critical role in the rapidly evolving AI infrastructure market.
- Market Share Advantage: TSMC commands approximately 72% of the global semiconductor foundry market, with over 90% market share in advanced AI chips, which provides the company with strong pricing power, ensuring sustained profitability.
- Long-Term Investment Potential: Although the current stock price is around 24.7 times projected earnings for the next 12 months, TSMC's importance and dominance in the tech industry make its stock an attractive long-term investment option, despite the analyst team not including it in the current best stock picks.
See More
TSMC Captures 70% Foundry Market Share by 2025
- Market Share Growth: TSMC's foundry market share reached 69.9% in 2025, up from 64.4% in 2024, with projected revenue of $122.54 billion reflecting a 36.1% year-over-year increase, showcasing its robust performance amid surging AI infrastructure demand.
- Quarterly Revenue Performance: Despite a slight dip in market share to 70.4% in Q4 2025, quarterly revenue still rose 2.0% sequentially to $33.72 billion, indicating strong revenue growth driven by higher average selling prices.
- Industry-Wide Performance: The top ten foundries generated a combined $169.47 billion in sales in 2025, a 26.3% increase year-over-year, highlighting a strong recovery in the industry driven by AI and high-end chip demand, with TSMC solidifying its market leadership.
- Technical Analysis and Price Action: TSMC shares rose 1.29% to $341.07 in premarket trading, although trading 5.6% below the 20-day SMA, the long-term trend remains positive with a 96.23% increase over the past 12 months, nearing 52-week highs.
See More
Intel Faces Shareholder Lawsuit Over Government Equity Agreement
- Shareholder Lawsuit Background: Intel faces a lawsuit in Delaware Court from shareholder Richard Paisner seeking to unwind an August 2025 agreement granting the U.S. government a 10% equity stake, which is alleged to be an 'unlawful contract' that effectively transferred about $11 billion in stock without 'meaningful consideration.'
- CHIPS Act Controversy: Central to the lawsuit is Intel's announcement of a direct government ownership stake funded by converting $2.2 billion in CHIPS Act grants and $8.9 billion in unpaid federal subsidies, with claims that this arrangement was structured to protect CEO Lip-Bu Tan's position rather than serve shareholder interests.
- Political Pressure Impact: The complaint highlights political pressure, noting that President Trump publicly called for Tan's resignation, citing conflicts of interest, followed by Tan's rapid visit to the White House, after which the government stake was announced, indicating the influence of political dynamics on corporate decisions.
- Market Reaction: Despite the ongoing lawsuit, Intel's stock rose by 0.99% to $45.70 in premarket trading on Friday, reflecting a degree of market optimism regarding the company's future performance despite the legal challenges it faces.
See More
The Iran Conflict Might Disrupt AI Advancements: Here's What to Expect.
- Impact on Various Sectors: The ongoing war in Iran is expected to affect multiple sectors, including technology.
- Key Issues: Major concerns include the supply of raw materials, rising interest rates, and the potential for a cyberwar.
See More
Analysis of Steven Cohen's Investment Portfolio
- Portfolio Size: Point72 Asset Management oversees an equity portfolio valued at over $86 billion, encompassing more than 3,800 positions, which demonstrates its broad and diverse investment strategy that effectively mitigates risk while capturing market opportunities.
- Top Five Holdings: As of the latest quarter, Point72's largest stock investments include Nvidia ($1.87 billion, 2.15%), Taiwan Semiconductor ($1.41 billion, 1.63%), Amazon ($1.21 billion, 1.40%), Microsoft ($1.01 billion, 1.16%), and Arista Networks ($1.00 billion, 1.14%), indicating a significant concentration in the technology sector.
- Tech Sector Focus: While Point72's portfolio is diversified in terms of the number of holdings, it is notably concentrated in the technology sector, particularly in companies related to AI infrastructure, reflecting Cohen's emphasis on future tech trends.
- ETF Holdings: In addition to individual stocks, Point72 holds substantial ETF positions, such as the Invesco QQQ Trust, which tracks the Nasdaq-100 index, further enhancing its exposure to tech stocks and indicating confidence in the ongoing growth of the technology sector.
See More
TSMC Continues Growth Amid AI Demand, Strong Market Position
- Market Share Advantage: TSMC commands approximately 72% of the global semiconductor foundry market, and its market share exceeds 90% in advanced AI chips, providing the company with significant pricing power and competitive advantages in the industry.
- Significant Revenue Growth: TSMC is projected to achieve $122.4 billion in revenue by 2025, reflecting a nearly 36% increase from 2024, primarily driven by surging demand for AI chips in data centers and cloud infrastructure, showcasing the company's robust performance in a rapidly growing market.
- High-Performance Computing Boost: The High-Performance Computing (HPC) segment accounted for 58% of TSMC's revenue in 2025, growing 48% from 2024, indicating that AI-related products are becoming the primary growth driver for the company.
- Long-Term Investment Value: While it's uncertain whether TSMC's stock will continue to rise over the next year, trading at 24.7 times projected earnings suggests that its stock remains relatively inexpensive given its dominant position in the tech industry, making it a suitable candidate for long-term holding.
See More
TSMC Reports 36% Revenue Growth in 2025
- Significant Revenue Growth: TSMC's revenue reached $122.4 billion in 2025, marking a nearly 36% year-over-year increase, which highlights its robust performance in the global semiconductor market, particularly amid surging demand for data center chips, thereby reinforcing its market leadership.
- AI Chip Driving Growth: The High-Performance Computing (HPC) segment accounted for 58% of revenue and grew 48% from 2024, indicating that AI-related chips are becoming TSMC's new growth engine, reflecting its critical role in the rapidly evolving AI infrastructure market.
- Market Share Advantage: TSMC commands approximately 72% of the global semiconductor foundry market, with over 90% market share in advanced AI chips, which provides the company with strong pricing power, ensuring sustained profitability.
- Long-Term Investment Potential: Although the current stock price is around 24.7 times projected earnings for the next 12 months, TSMC's importance and dominance in the tech industry make its stock an attractive long-term investment option, despite the analyst team not including it in the current best stock picks.
See More
TSMC Captures 70% Foundry Market Share by 2025
- Market Share Growth: TSMC's foundry market share reached 69.9% in 2025, up from 64.4% in 2024, with projected revenue of $122.54 billion reflecting a 36.1% year-over-year increase, showcasing its robust performance amid surging AI infrastructure demand.
- Quarterly Revenue Performance: Despite a slight dip in market share to 70.4% in Q4 2025, quarterly revenue still rose 2.0% sequentially to $33.72 billion, indicating strong revenue growth driven by higher average selling prices.
- Industry-Wide Performance: The top ten foundries generated a combined $169.47 billion in sales in 2025, a 26.3% increase year-over-year, highlighting a strong recovery in the industry driven by AI and high-end chip demand, with TSMC solidifying its market leadership.
- Technical Analysis and Price Action: TSMC shares rose 1.29% to $341.07 in premarket trading, although trading 5.6% below the 20-day SMA, the long-term trend remains positive with a 96.23% increase over the past 12 months, nearing 52-week highs.
See More
Intel Faces Shareholder Lawsuit Over Government Equity Agreement
- Shareholder Lawsuit Background: Intel faces a lawsuit in Delaware Court from shareholder Richard Paisner seeking to unwind an August 2025 agreement granting the U.S. government a 10% equity stake, which is alleged to be an 'unlawful contract' that effectively transferred about $11 billion in stock without 'meaningful consideration.'
- CHIPS Act Controversy: Central to the lawsuit is Intel's announcement of a direct government ownership stake funded by converting $2.2 billion in CHIPS Act grants and $8.9 billion in unpaid federal subsidies, with claims that this arrangement was structured to protect CEO Lip-Bu Tan's position rather than serve shareholder interests.
- Political Pressure Impact: The complaint highlights political pressure, noting that President Trump publicly called for Tan's resignation, citing conflicts of interest, followed by Tan's rapid visit to the White House, after which the government stake was announced, indicating the influence of political dynamics on corporate decisions.
- Market Reaction: Despite the ongoing lawsuit, Intel's stock rose by 0.99% to $45.70 in premarket trading on Friday, reflecting a degree of market optimism regarding the company's future performance despite the legal challenges it faces.
See More
