In this article, we will dissect whether Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is the most unstoppable artificial intelligence (AI) stock to buy. We will also take a closer look at the advancements in the artificial intelligence industry which are also explained in this rytr review. To view more unstoppable AI stocks, check our free report on the 7 Unstoppable Artificial Intelligence (AI) Stocks To Buy Now.
The Bull Case for AI
On April 20, Matt Bryson, Wedbush Enterprise Hardware Analyst, appeared in an interview on Yahoo Finance where he discussed the major players in the AI industry and how interest rate cuts may have little to no impact on the tech wave. Shares of tech stocks including Advanced Micro Devices, Inc. (NASDAQ:AMD) and Intel Corporation (NASDAQ:INTC) have been down by 15% over the past 30 days, followed by the Philadelphia Semiconductor Index dropping by 10% despite recent highs previously. Despite the pullback in industry activity, Bryson holds a bullish view on artificial intelligence. Bryson highlights the fuel in AI is backed by chip stocks and cloud services providers, lifting NVIDIA Corporation (NASDAQ:NVDA), Advanced Micro Devices, Inc. (NASDAQ:AMD), and Amazon.com Inc (NASDAQ:AMZN). He added that despite the pullback, large tech stocks, especially chip makers, will continue investing in AI in 2025 and post strong growth results. Bryson suggests that high interest rates will certainly weigh on consumer spending in the long run, impacting high multiple stocks such as large chipmakers. He then said that interest rates may have little to no impact on the fundamental landscape of technology and AI. According to Bryson, data center operators like Microsoft Corporation (NASDAQ:MSFT) and Amazon.com Inc (NASDAQ:AMZN) will continue to bet on developing AI applications.
Bryson thinks that NVIDIA Corporation’s (NASDAQ:NVDA) Blackwell, a next-gen semiconductor product, will impact the industry positively. While he is certain that AI hardware and software companies will define parameters of success for the industry, he claims it is uncertain to predict the technological developments in AI at the moment. Bryson also holds a bullish view on Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) after NVIDIA Corporation (NASDAQ:NVDA) and talked about the possibility of companies like Microsoft Corporation (NASDAQ:MSFT) and Amazon.com Inc (NASDAQ:AMZN) developing their own semiconductor products, altering Taiwan Semiconductor Manufacturing Company Limited’s (NYSE:TSM) position in the market. Bryson said while he expects the industry to grow, it is difficult to predict what sectors AI might penetrate.
Some Developments in the AI Space
In a groundbreaking update, On May 13, OpenAI launched GPT-4o, a platform capable of working across audio, vision, and text in real-time. The new application takes interactions between humans and computers to the next level. The application can provide outputs in response to audio inputs in 232 milliseconds, with an average of 320 milliseconds. While the new product complements GPT-4 Turbo’s performance on text in English and code, it is also 50% cheaper and much faster. The tool is also equipped to understand vision and audio inputs easily.
On May 20, Microsoft Corporation (NASDAQ:MSFT) launched CoPilot + PCs, designed for artificial intelligence. The new PCs are one of the most intelligent and fastest PCs to be ever built. Its new silicon can perform 40-plus trillion operations per second, has a long battery life, and comes with built-in advanced AI models. Individuals in the custody of the new devices will be able to generate and refine images in real-time using Cocreation and function in over 40 languages using the Live Captions tool. The PCs will be made available starting June 18.
Wall Street is Bullish on Microsoft Corporation (NASDAQ:MSFT). On May 22, analyst firm, Wedbush reiterated an Outperform rating on Microsoft Corporation (NASDAQ:MSFT) and maintained a price target of $500. Based on analyst estimates over the past 3 months, 32 Wall Street analysts held a buy rating on the stock, with an average price target of $491.23 and a high forecast of $600. The stock’s average price target has an upside of 11.88% from its current price of $427.25.
Now that we have discussed the latest developments in the AI space, let’s take a look at the 7 unstoppable artificial intelligence (AI) stocks to buy. You can also read our piece on the best AI stock picks of billionaire Steve Cohen and billionaire Stanley Druckenmiller’s best AI stocks to buy now.
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)
YTD Gains as of April 23: 50.14%
Number of Hedge Fund Holders: 135
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is a semiconductor manufacturing company in Taiwan. The leading AI chipmaker produces a range of discrete semiconductors including small signal transistors, high-voltage rectifiers, switching diodes, and MOSFETs. The company provides support to major AI chip makers including NVIDIA Corporation (NASDAQ:NVDA).
At the close of the first quarter of 2024, 135 hedge funds were long Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) and held stakes worth $16.58 billion in the company. As of March 31, Fisher Asset Management was the top investor in the company and held a stake worth $3.95 billion.
On April 18, Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) reported earnings for the fiscal first quarter of 2024. The company reported earnings per share of $1.38, beating estimates by $0.06. It also reported revenue worth $18.23 billion, ahead of market consensus by $224.73 million, with a year-over-year revenue growth rate of 9.69%.
Third Point Management stated the following regarding Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) in its Q1 2024 investor letter:
“During the quarter, we added to our Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) investment, which we initiated in May of last year. TSMC is coming off its worst year since the Global Financial Crisis, and in the years to come we see a combination of cyclical recovery plus structural growth in AI demand fueling substantial earnings growth for the company.
We view TSMC as the “toll road” of the semiconductor industry, particularly for AI compute. TSMC holds more than 90% market share for leading edge semiconductor manufacturing, where all AI silicon is being processed. Beyond their reliable execution producing some of the most complex products on earth in volume, TSMC has spent decades optimizing for and building ecosystems around their 500+ customers, an advantage that cannot be replicated overnight…” (Click here to read the full text)”
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is one of the most unstoppable AI stocks to buy now but ranks 4th. Click to see the 7 Unstoppable Artificial Intelligence (AI) Stocks To Buy Now.
If you are looking for an AI stock that is as promising as Microsoft 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.
