10 Most Profitable Tech Stocks to Buy Now

6. Taiwan Semiconductor Manufacturing Company Ltd. (NYSE:TSM)

TTM Net Income: $36.5 billion

Number of hedge funds: 158

Taiwan Semiconductor Manufacturing Company (NYSE:TSM) is the world’s largest and most advanced semiconductor foundry. As opposed to the integrated device manufacturers (IDMs) such as Intel, TSMC operates exclusively as a pure-play foundry, and does not design its own chips but focuses on high-performance semiconductor fabrication. It plays a crucial role in the global technology supply chain by manufacturing chips for major companies, including Apple, NVIDIA, AMD, and Qualcomm. The company’s margin profile is second best among the companies covered in this list with an operating margin of 46% and net profit margin of around 41%.

With its deep technological prowess, Taiwan Semiconductor Manufacturing Company (NYSE:TSM) generally finds itself at the center of the news flow related to semiconductor manufacturing. On February 15, Bloomberg reported that the company is considering acquiring Intel Corp. (NASDAQ:INTC)’s U.S. manufacturing facilities. This development comes after officials from the Trump administration proposed the idea to Taiwan Semiconductor Manufacturing Company (NYSE:TSM) to bolster American manufacturing capabilities. However, another report from Reuters suggests that some officials suggest that the administration has expressed reservations about a foreign entity operating Intel Corp. (NASDAQ:INTC)’s U.S. factory. These discussions are in preliminary stages, and no formal agreements have been reached. Similar speculation of Intel’s breakup into parts and spin-offs has also been doing the rounds amid which Intel’s share price has rallied 24% in one week.

Taiwan Semiconductor Manufacturing Company (NYSE:TSM) leads in process technology, being the first to mass-produce 3nm chips and investing heavily in 2nm and beyond. As demand for AI, high-performance computing (HPC), and advanced mobile processors grows, TSMC is well-positioned to capitalize on the industry’s shift to smaller, more efficient, and more powerful chips. The company is a consensus buy with an upside potential of around 26%. On January 17, Barclays raised their price target to $255 from $240 and reiterated their Overweight rating on the shares basing their positive view on expected growth from AI.