Philippe Laffont Stock Portfolio: Top 10 Stock Picks

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

Coatue Management’s Stake Value: $1.96 billion

Number of Hedge Fund Holders: 186

Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) announced the intention to expand its investment in advanced semiconductor manufacturing in the US by an additional $100 billion. The company’s total investment in the US is expected to reach US$165 billion. Through the expansion, it expects to create hundreds of billions of dollars in semiconductor value for AI and other cutting-edge applications. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)’s business in Q4 was aided by healthy demand for the industry-leading 3nm and 5nm technologies.

Notably, in Q4 2024, shipments of 3-nanometer made up 26% of total wafer revenue and 5-nanometer accounted for 34%. Advanced technologies, defined as 7-nanometer and more advanced technologies, accounted for 74% of total wafer revenue. In Q1 2025, Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)’s business is expected to be impacted by smartphone seasonality, partially offset by continued growth in AI-related demand. Also, the ongoing AI boom demonstrates a healthy opportunity for the company’s long-term growth. AI applications need powerful and energy-efficient chips, which align perfectly with Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)’s advanced manufacturing capabilities.

Parnassus Investments, an investment management company, released the Q4 2024 investor letter. Here is what the fund said:

“Taiwan Semiconductor Manufacturing Company Limited’s (NYSE:TSM) leading position in AI chip production continued to boost investor sentiment on the stock. During the year, moves by several large technology companies to increase their AI investments underscored demand for TSMC’s chips and supported the stock’s rise.”