15 Best Hardware Stocks According to Hedge Funds

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

Number of Hedge Fund Shareholders In Q1 2024: 135

Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is the world’s largest contract chip manufacturer that makes AI chips for firms like AMD and NVIDIA. A growth in AI shipments worldwide proved to be quite a catalyst for the firm in May 2024. During May, Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)’s revenue grew by a strong 30% to sit at $7.1 billion. This growth comes just as ASML, the world’s leading chip manufacturing equipment company, confirmed that it will ship its advanced high NA EUV scanner to TSMC. These machines are crucial for future manufacturing technologies, and TSMC plans to upgrade its roadmap to 2-nanometer chips in 2025.

During Q1 2024, 135 hedge funds covered by Insider Monkey’s research were Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)’s stakeholders. Ken Fisher’s Fisher Asset Management owned the most valuable stake which was worth $3.9 billion.

Looking at the future, Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is trading at a forward P/E of 26, implying that growth should be only slightly faster than the market’s. Baron Funds remained convinced for the Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)’s leadership potential in its Q1 2024 investor letter as it stated:

Semiconductor giant Taiwan Semiconductor Manufacturing Company Limited contributed in the first quarter due to investor expectations for a continued strong cyclical recovery in semiconductors and significant incremental demand for AI chips. We retain conviction that Taiwan Semiconductor’s technological leadership, pricing power, and exposure to secular growth markets, including high-performance computing, automotive, 5G, and IoT, will allow the company to sustain strong double- digit earnings growth over the next several years.