The artificial intelligence (AI) boom appears to be just beginning and could continue to increase over the next decade. Celebrity investor Cathie Wood’s Ark Invest recently predicted that AI data center spending could triple from about $500 billion to $1.4 trillion by 2030. The investment firm predicts that most of that spending will go to graphics processing units (GPUs), but that AI ASICs (application specific integrated circuits) will have a significant market share.

One of the companies best positioned to be a winner in this environment is Taiwan Semiconductor Manufacturing (NYSE: TSM).

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The best thing about TSMC is that the company wins regardless of market share artificial intelligence ASICs may or may not take from GPUs. The foundry is the leading manufacturer of both chip types and has close relationships with all major AI chip designers, including Nvidia i Broadcom.

It is also the leading manufacturer of other advanced chips, such as those used in smartphones and Apple is one of its biggest customers, recently overtaken by Nvidia. As new markets with advanced chip needs, such as autonomous driving and robotics, continue to expand, TSMC will also benefit.

Meanwhile, TSMC has a near-monopoly on advanced chip manufacturing. Its main rivals, Intel i Samsungboth have struggled to produce advanced logic chips at scale with high performances. Meanwhile, Intel’s foundry business is bleeding cash, while Samsung has focused more on the booming memory market, where TSMC does not compete. This makes the foundry the only game in town for large-scale manufacturing of advanced chips. This has given the company strong pricing power, with reports that it has already presented customers with a four-year schedule of price increases. Its pricing power has also helped TSMC expand its gross margin.

Going forward, TSMC sees its AI revenues growing at a mid-to-high compound annual growth rate (CAGR) of 50% through 2029. Demand is so strong that it significantly increased its capital expenditure (capex) budget this year to between $52 billion and $56 billion, compared to less than $41 billion in 2025. They remain strong and are working closely with top chip designers to help them meet their growing demand.

With the stock trading at a forward price-to-earnings (P/E) ratio of 24 times 2026 analyst estimates and a forward price-to-earnings-growth (PEG) ratio of 0.7 (with a PEG below 1 considered undervalued), AI is a reasonably valued stock for the next decade.

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Geoffrey Seiler holds positions at Broadcom. The Motley Fool has positions in and recommends Apple, Intel, Nvidia and Taiwan Semiconductor Manufacturing. The Motley Fool recommends Broadcom. The Motley Fool has one disclosure policy.

Artificial intelligence (AI) could deliver another decade of growth. This stock is a prime candidate to be a winner. was originally published by The Motley Fool