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With the rise of artificial intelligence (AI), there are a lot of cool things coming technological actions on the market today. Tech stocks are my favorite segment because these companies are causing monumental changes in the way we live and work every day.
Today, many of these changes are coming from AI, as we are finding new ways to be more efficient. AI is growing as a tool to automate workflows, manage supply chains, provide customer service, predict future events and detect fraud. Fortune Business Insights predicts the AI market will grow from $375.9 billion this year to $2.48 trillion by 2034, with a compound annual growth rate of 26.6%.
Will AI create the world’s first billionaire? Our team has just published a report on the one little-known company, called “Indispensable Monopoly” that provides the critical technology that Nvidia and Intel need. Continue »
There are many ways to invest, but if you only have $1,000, you could do a lot worse Taiwan Semiconductor Manufacturing co. (NYSE: TSM). I think TSMC, as it’s better known, is the closest thing to a surefire long-term winner.
TSMC is a major company in the production of semiconductor chips, which power personal computers, tablets, smartphones and other devices. When we talk about AI, these chips are clustered by the thousands and used in data centers to power complex AI programs. NvidiaGraphics processing units from are the best known, but there are many other companies that design chips, including Broadcom i Advanced microdevices.
But while these companies are designing the chips, they can’t manufacture them without a foundry. And TSMC is the largest foundry in the world. TSMC says it produced more than 11,800 products in 288 separate processes by 2024, giving it unmatched reach in the industry.
TSMC’s wide reach means there’s never a shortage of customers. The company continues to grow rapidly. Fourth quarter revenue was $33.73 billion, up 25.5% from a year ago. TSMC posted a profit margin of 48.3%.
Customers are lining up to use TSMC because it has proven expertise in making the most powerful chips.
Chips with smaller transistors are more powerful and efficient, and TSMC must continue to evolve to meet demand. By 2023, TSMC was making more than half of its revenue from chips larger than 7nm, but today it’s producing more 3nm and 5nm chips. Management said in the fourth quarter that 3nm chips accounted for 28% of the company’s total shipments, compared with 23% in the third quarter. 5nm chips accounted for 35% of all shipments, down from 37%.
