Chipsets known as graphic processing units (GPUs) are perhaps the most important hardware in generative AI development at the moment. In recent years, investing in semiconductor shares has generally been a great idea – because you have almost guaranteed a form of exposure to GPUs or data centers.
2025, however, has not received the best start for chip stocks.
Whether it was caused drama by the Chinese start-up Deepseek, the new rates of US President Donald Trump or Exalted Investor expectations, many names in the Chip-Rijk have not done so well this year. From a macroSpective, the Vaneck Semiconductor ETF So far 4% has fallen in 2025 (from 3 March). When it comes to specific companies, take Nvidia And Advanced micro deviceswho have fallen their shares so far this year by 7% and 17% respectively.
Although many investors do not seem to look from Nvidia or AMD, there is still a stock that is entangled in a broader sale in the semiconductor landscape – and I think it is worth buying the dip now.
Let’s investigate why there is now a lucrative opportunity to buy Taiwan Semiconductor Manufacturing(NYSE: TSM) Stock hand over fist.
When it comes to brand recognition on the chip market, investors do not have to look much further than Nvidia and AMD. These two Juggernuts lead the load in the GPU revolution. In the meantime, Widthcom plays an integral role in resting data centers with advanced chipware, while Micron technologyThe high bandwidth storage solutions with high bandwidth are becoming increasingly important as AI -data wheatloads become larger and more complex.
With so many other names that dominate newspaper heads and talk points, it would not surprise me if you are not even aware of Taiwan Semi or TSMC. The thing is that many leaders in the chip space – including Nvidia, AMD and Broadcom – have to credit Taiwan Semi for a large part of their success.
TSMC specializes in foundry solutions, which is in fact a chic term that means that it actually produces chips and integrated systems for semiconductor companies. In other words, without TSMC, Nvidia’s chip architecture would be more an idea than a tangible product.
Given how much requirement there has been for GPUs in recent years, it should not come as a surprise that the income and profit of Taiwan Semi rise. That said, I think the growth of the company is just starting to make up in acceleration.
Many of the “beautiful seven” companies, such as Microsoft” Amazon” AlphabetAnd Meta platformsExplore his adapted silicon as a strategy to migrate from an exaggerated dependence on Nvidia’s chipware. These great technical giants, as well as Chatgpt Maker OpenAi, are reportedly working together with TSMC to help their visions go to life.
TSM Revenue estimates for current data from the financial year by Ycharts.
Although TSMC has already acquired almost two-thirds of the possibilities of the foundry market, I think that the arrival of more adapted silicon-after new architectures of NVIDIA and AMD will further strengthen the company’s leadership position in the coming years and will lead to a long-term phase of turnover and profit.
Image source: Getty images.
Despite the strong market position of TSMC and robust financial prospects, shares of the chip shares are shockingly cheap.
TSM PE ratio (forward) data by Ycharts.
At present, the average forward price gain (p/e) is several for the S&P 500 Is about 21. As the graph illustrates above, the forward p/e of Taiwan Semi is about 19. For me, this inequality suggests that investors can see an investment in the S&P 500 as less risky than TSMC – and one that may also wear more upside down.
In my eyes, the two most important risks that run around an investment in TSMC are the following:
The semiconductor industry is cyclical.
Geopolitical tensions between China and Taiwan.
Although I can understand those points in an academic sense, I think fears about those subjects are exaggerated. The demand for chip is not expected not to slow down, because the market is expected to increase ten times in the following decade and reach a size of almost $ 1 trillion.
Moreover, the activities of TSMC are not exclusively for Taiwan. In fact, the company has just announced at the beginning of March that it will invest an extra $ 100 billion to expand its production printing print in the US. This seems like a logical decision, since Big Tech is planning to spend more than $ 300 billion in AI infrastructure alone in 2025.
I think TSMC stock is now a bargain. Long-term investors may want to consider buying this shareholding hand, before the company’s production operation witnesses an even further scale, because the AI revolution is sufficient on full steam.
Before you buy shares in the production of semiconductors of Taiwan, consider this:
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*Stock Advisor Return on March 3, 2025
John Mackey, former CEO of Whole Foods Market, a subsidiary of Amazon, is a member of the board of directors of the Motley Fool. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and Sister of Meta Platforms CEO Mark Zuckerberg, is a member of the Motley Fool’s Board of Directors. Suzanne Frey, a director of Alphabet, is a member of the board of directors of the Motley Fool. Adam Spatacco has positions in alphabet, Amazon, Meta Platforms, Microsoft and Nvidia. De Motley Fool has positions and recommends Advanced Micro Devices, Alphabet, Amazon, Meta Platforms, Microsoft, Nvidia and Taiwan Semiconductor Manufacturing. The Motley Fool recommends Broadcom and recommends the following options: Lang January 2026 $ 395 calls on Microsoft and short January 2026 $ 405 calls on Microsoft. The Motley Fool has a disclosure policy.
1 Artificial Intelligence (AI) Semiconductor shares to buy over fist at the moment (hint: it is not nvidia or amd) was originally published by the Motley Fool
