12 Best Technology Stocks to Invest In for the Long Term

6. Taiwan Semiconductor (NYSE:TSM)

Number of Hedge Fund Holders: 158

Taiwan Semiconductor (NYSE:TSM) is a chipmaker that supplies chips to leading tech companies like Apple, NVIDIA, Qualcomm, and AMD. With its advanced 2nm technology and leadership in 3nm, 5nm, and 7nm chip production, it maintains its dominance in the semiconductor industry, especially in AI and high-performance computing.

The company holds over 60% of the market share. This, together with the current industry supply constraints, gives it pricing power. It reported a 39% year-over-year revenue increase in Q3 2024 which was attributed to the rising demand for AI-related hardware. Its advanced manufacturing capabilities, including its CoWoS packaging technology crucial for AI chips, position it at the forefront of semiconductor innovation.

ClearBridge All Cap Growth Strategy recently added Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) to its portfolio, recognizing its role as the leading foundry for major chipmakers. It stated the following regarding  in its Q3 2024 investor letter:

“While the Strategy continues to have a significant position in Nvidia, we are underweight semiconductors versus the benchmark. We added to our semiconductor positioning during the quarter with the purchase of Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM). TSM, an out-of-benchmark name, is the world’s fabrication production provider of choice. The criticality and sophistication of its manufacturing footprint powers all of the leading edge fabless global semiconductor companies, including Apple, Nvidia, Qualcomm, AMD and Broadcom. While AI has driven upside in data centers, PCs and handsets are at cycle lows, positioning half of the company’s business for a recovery.”