10 Best Stocks to Buy and Hold For 5 Years

4. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)

Number of Hedge Fund Holders: 156

Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is one of the best stocks to buy and hold for five years. The semiconductor company makes chips for technology giants like NVIDIA and AMD.

In the third quarter of 2024, Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) logged revenue worth $23.7 billion (NT$759.69 billion) and net income worth $10.13 billion (NT$325.26 billion), up by 39% and 54.2% year-over-year, respectively. The company expects fourth-quarter revenue to range between $26.1 billion and $26.9 billion. TSM attributes its revenue growth to the increasing demand for artificial intelligence and its 3nm and 5nm technologies.

TMSC expects to spend $40 billion to $32 billion in capital expenditure in 2024, allocated to advanced process technologies, specialty technologies, and advanced packaging and testing. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is expanding its presence across the world. The company recently formed a joint venture with major partners, in Dresden, Germany, positioning TMSC as a leader in the foundry industry. More recently, the company expanded its partnership with Amkor to facilitate advanced packaging in Arizona, fueling the semiconductor ecosystem in the region.

Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) expects revenue from AI chips to increase at a compound annual growth rate (CAGR) of 50% by 2027, contributing to its ranking on our list.

Diamond Hill Capital stated the following regarding Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) in its Q2 2024 investor letter:

“On an individual holdings’ basis, top contributors to return in Q2 included our long positions in Alphabet, Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) and Microsoft. Semiconductor manufacturer Taiwan Semiconductor’s (TSMC) fundamentals remain solid as demand for its chips continues growing — particularly as the machine learning and cloud computing trends gain more traction.”