We recently published a list of 10 Best Stocks to Buy and Hold For 2 Years. In this article, we are going to take a look at where Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) stands against other best stocks to buy and hold for 2 years.
Will The Tech Stocks Continue to Rally?
On March 27, CNBC reported that the stocks dipped on Wednesday, led by the technology sector. The S&P 500 dipped around 1.12%, followed by the Dow Jones, which fell by 132.71 points. More notably, the technology-dominated NASDAQ dropped by 2.40% closing at 17,899.01 points. The drop in the stock market was further aggravated by the White House’s announcement of new tariffs on auto imports.
To talk about the future of technology and artificial intelligence Doug Clinton, Intelligent Alpha founder, joined CNBC for an interview on March 29. He mentioned that it has been more than a month now that the big technology names, especially artificial intelligence companies, are not performing so well. However, despite the recent dip, Clinton maintained his bullish sentiment for the sector. He pointed out that if we zoom out of the current situation and look at the sector from two to three years from today, we will still see AI stocks rally and large capital expenditure bills. Clinton pointed out that if you are a believer in AI trade it is important to remember that the market has had more than two years of absolutely no turbulence. This period of stability started from the end of 2022 to the beginning of 2025. Clinton categorized the current dip as the first real challenge for the AI trade. Referencing history, he pointed to the Dot Com era, when the Dot Com trade faced its first real challenge. The turbulence took 200 days to reach a new NASDAQ high back then. He clarified that this does not mean that the current turbulence will last 6 months, however, if someone believes in the AI trade then they need to be patient through the dip.
READ ALSO: 10 Best Stocks to Buy and Hold For 3 Years and 12 High Growth Non-Tech Stocks That Are Profitable in 2025.
While talking about the valuations, Clinton highlighted that the question is about the kind of risks an investor wants to take during the trade. He noted that investors can choose to trade during the turbulence by exiting the market at high times, however, the risk is that the AI stocks can rise 20% to 30% in no time, making it difficult for investors to get back in. Clinton pointed out that he is looking at this trade from a two to three years lens. He believes that this will give him enough exposure and will also reduce the risk of missing out on the bigger picture.
Our Methodology
To compile the list of 10 best stocks to buy and hold for 2 years we sifted through financial media reports. From these sources, we shortlisted stocks with more than 20% sales growth over the past 3 years. Next, we ranked these stocks in ascending order of the number of hedge fund holders, sourced from Insider Monkey’s Q4 2024 database.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A close-up of a complex network of integrated circuits used in logic semiconductors.
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)
3-Years Sales Growth: 22.17%
Number of Hedge Fund Holders: 186
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is another leading technology company that focuses on manufacturing integrated circuits. The company engages in the development of cutting-edge semiconductor nodes, along with design ecosystems for specialized technologies. Its technologies are used across various high-level industries making it a renowned player. It is one of the best stocks to buy and hold for 2 years.
On March 28, Barclays analyst Simon Coles maintained a Buy rating on the stock with a price target of $255. Moreover, Nightview Capital mentioned Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) in its Q4 2024 investor letter, stating that the company holds a 67% market share in the global foundry market, which gives it a competitive advantage of pricing power over its competitors. The company in its February 2025 revenue release reported growing its revenue by 43.1% year-over-year to reach NT$260.01 billion.
Moreover, on March 4, Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) announced its intention to increase its investment in advanced semiconductor manufacturing in the United States by $100 billion. The company already has an ongoing investment of $65 billion in Phoenix, Arizona.
Nightview Capital stated the following regarding Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) in its Q4 2024 investor letter:
“Semiconductors are the unsung heroes of the modern economy, powering everything from AI and 5G to electric vehicles and renewable energy systems. Without them, innovation stalls. The semiconductor industry has entered a supercycle, driven by unprecedented demand across industries that rely on advanced computing. And while this notoriously boom and bust industry has seen cycles before we believe this cycle remains in relative infancy.
These advancements aren’t incremental. As AI systems scale, the need for cutting-edge semiconductors will only accelerate. We believe the companies at the forefront of this revolution are foundational to the next wave of global progress.
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM): Core Opportunity: TSMC, the world’s largest dedicated chip foundry, holds an impressive 67% share of the global foundry market. Its dominance is even more pronounced at the cutting edge of semiconductor technology, where it plays a critical and unparalleled role. Their lead has only been strengthened recently and they have begun to take advantage of their pricing power.
Competitive Advantage: Revenue Growth: TSMC posted 34% YoY revenue growth in November 2024 to $8.55 billion, with robust demand across AI, high-performance computing, and 5G technologies.…” (Click here to read the full text)
Overall, TSM ranks 2nd on our list of best stocks to buy and hold for 2 years. While we acknowledge the potential of TSM as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than TSM but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
