We recently published a list of Top 10 AI News You Shouldn’t Miss. In this article, we are going to take a look at where Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) stands against other top AI news you shouldn’t miss.
All everyone could talk about in the technical AI landscape these days is DeepSeek-R1, a Chinese open-source LLM that analysts believe can give major American AI companies a run for their money. Why is DeepSeek making waves and why is it called a breakthrough in the AI race?
DeepSeek AI model is several times cheaper to use for professional purposes when compared to its American counterparts including OpenAI’s o1 model. Media reports also suggest the model beat almost all key AI models in the industry by significant margins.
CNBC’s Deirdre Bosa explained what makes these Chinese models a challenge for US tech companies:
“The cost, I mean, these models coming out of China are just built at a fraction of the price when you think about OpenAI. That’s spending $5 billion a year, burning through billions of dollars a year. These models, the DeepSeek for example, they say they built it for less than $6 million. ByteDance as well, you know, shows that it was built and you can access it at much, much lower prices. So, this really turns on sort of this truth that we have thought about generative AI for the last few years—that you need hundreds of millions of dollars to develop bigger and better models. What the Chinese labs and companies are doing is they’re going straight to the frontier. They’re building with sort of infrastructure and outputs that are already out there, built in many cases by American companies and startups, and they’re improving on it, they’re innovating on it, and producing models that are just as good, in some cases, at a fraction of the cost.”
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For this article, we picked 10 AI stocks currently in the news. With each company we have mentioned the number of hedge fund investors. 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 275% since May 2014, beating its benchmark by 150 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)
Number of Hedge Fund Investors: 158
Evercore ISI recently said the market is expected to experience more of what it saw in 2024, with the investment firm expressing a positive outlook for Information Technology in 2025, calling it “Fill IT up again.”
The firm emphasized that “the bull market in the S&P remains strong” and expects “another 22% upside to 7,200 in 2025.” Currently, the benchmark index stands at 5,940 as the new year begins.
Backing its optimistic view is the Information Technology sector, with Evercore ISI predicting tech will once again lead the market higher. Within the sector, both semiconductors and software were highlighted.
On Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), the firm stated, “semis are coiled for a major move higher,” pointing to high-conviction positions including Broadcom.
ClearBridge All Cap Growth Strategy stated the following regarding Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) 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.”
Overall, TSM ranks 2nd on our list of top AI news you shouldn’t miss. While we acknowledge the potential of TSM, our conviction lies in the belief that under the radar 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.
