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Trending News:Shahid Afridi heartbroken as Pakistan boycotts India 2026 T20 World Cup clashIn Gaza, my sister and niece were my life. Israel killed themClient ChallengeThe aunt and cousin of Mexico’s education minister were “brutally murdered” in their home, he saysThe BondBloxx IR+M Tax-Aware ETF for Massachusetts Residents declares a monthly distribution of $0.18133During the 1996 ODI WC, a team boycotted Australia’s ICC World Cup matches three timesWill Josh Hazlewood be available for the 2026 T20 World Cup? Here’s what we know about Australia’s pacemakersThe Rafah crossing in Gaza has reopened on a limited basis after two years of warBeat those fees and you’ve got a dealInvestingPro’s Fair Value model predicts a 47% collapse in IonQ stockHow to Watch the 2026 Winter OlympicsU.S. Treasury yields fall as investors weigh uncertainty over Fed leadershipAndre Ward sees only one winner in 147th fight over Shakur Stevenson vs. Conor Benn: ‘No disrespect’Client ChallengeThe Bondbloxx Bloomberg Six-Month Target Duration US Treasury ETF reports a monthly distribution of $0.1649Star worth £17m wants to join Nottingham Forest todayFunding impasse continues as partial U.S. government shutdown enters third dayLiam Conejo Ramos returns to Minnesota after being released from ICE custodyGoldman Sachs leads $75 million funding round for Fieldguide, an AI-native accounting platformYashasvi Jaiswal and Shardul Thakur return, Mumbai Ranji Trophy Karnataka clash line-up announcedBitcoin Supercycle 2026 Cancelled! — Changpeng Zhao (CZ) explains whyLeBron James ‘humbled’ by All-Star Game inclusionDwayne Johnson confirmed to join WWE and move in with three-time championChina further executes Myanmar fraud center suspect Crime NewsJapanese investors have moved into global funds amid inflation concernsBondBloxx BBB 5-10 Year Corporate Bond ETF declares a monthly distribution of $0.17299PALANTIR CTO SANKAR: AI is a tool for American workers, not their replacementThe Colombian president, an outspoken critic of Trump, is going to the White House30 years after the founding of ‘Silicon Alley,’ New York’s tech scene is too big to have a centerAfghanistan make big move by winning RCB IPL title to enter 2026 ICC T20 World CupMazda’s global vehicle production rebounds in DecemberHow to trade market spirals as investors dump gold, silver and oilIraq begins investigations into IS prisoners transferred from Syrian campsFabrizio Romano drops Fulham’s key transfer update on PSV Ricardo PepiSpreadex acquired over 6% stake in Amigo HoldingsAnti-ICE Protesters Begin Month-long Tech and AI Boycott. Here’s how it worksT20 World Cup 2026: Ricky Ponting’s top run scorer and player of the tournamentApple scores key win as India allows foreign companies to finance equipment without tax riskTough-on-crime candidate wins Costa Rica presidential electionThe Kennedy Center will close for two years for renovations, Trump says, after contractors backlashCommodity losses drag Shanghai stocks to biggest drop in 10 monthsIshan Kishan vs Tilak VermaTaiwan Semiconductor Manufacturing or AMDAndre Ward gives an honest review of Tyson Fury’s return after one year outUK manufacturing PMI rose to the highest since August 2024Video: Hope and fear in Syrian region wresting back from SDF | KurdsTonali is a non-starter for Arsenal as the Gunners scramble to replace the slain MarinoThe iShares USD Green Bond ETF declares a dividend of $0.1697Danish Kaneria backstabs Pakistan, calls India’s boycott of match ‘suicidal’Client ChallengeTodd Blanche contests 5-year-old’s asylum claim, father detained by ICENottingham Forest prepares to bring in Fati, Barcelona open for saleChevron Q4 2025 Net Income Falls 12.5% to $2.84 BillionTDK Q3 FY2026 slides: Record sales 26.5% revenue rise, raises guidanceDerek Chisora warns Daniel Dubois about one guy to avoid in comeback fight: ‘He’s going to KO you’Passengers at Sydney train station frightened by snakeTriple H must abandon the current WWE tradition or it will ruin WrestleMania 42VanEck Vectors High-Yield Municipal Index ETF declares a monthly distribution of $0.1859Client ChallengeHarbhajan Singh launches open challenge to Pakistan’s Mohsin Naqvi after India boycotts clashesU.S. steps up pressure on Cuba, denies security threat accusations Politics NewsCanadian military heads to US for F-35 ceremony despite renewed trade tensionsSingapore will establish a national space agency to seize economic opportunities in spaceDirector sells 15,000 shares of GKOS for $1.9 millionWatch: Mitchell Marsh breaks silence on Pakistan boycott of India matches and Bangladesh exit from 2026 T20 World CupGeorgia hotel room shootout leaves one police officer dead, another seriously injuredGaza’s key Rafah border crossing with Egypt has reopened, but only to a limited extentRobinhood UK has launched a stocks and shares ISA with a 2% cash bonusThe Global X Interest Rate Volatility and Inflation Hedge ETF declares a monthly distribution of $0.0500Cristiano Ronaldo goes on strike and refuses to play for Al-Nasr as PIF row intensifiesSunderland now considering signing Real Madrid’s EnderrickFabio Wardley calls for heavyweight grudge match as first world title defenseIndia doubles down on AI ambitions, lures big tech companies with long-term tax breaksSandwiched between Trump and China, India seeks distant friendshipsJPMorgan downgrades Best Buy stock to Neutral on computing headwindsWhy these artificial intelligence (AI) stocks are catching the attention of institutional investors“Think it’s inkigayo” – Fans divided over KATSEYE’s live vocals and choice to perform “Gnarly” instead of “Gabriella” at the 2026 Grammy AwardsShashi Tharoor accuses BCCI of politicizing cricket after Pakistan’s shocking boycott of 2026 T20 World CupGaza’s main Rafah crossing with Egypt reopensGaza’s Rafah crossing with Egypt has reopened to a limited number of PalestiniansJPMorgan upgraded Church & Dwight stock to Neutral in portfolio changesGlobal X 1-3 Month T-Bill ETF declares a monthly distribution of $0.3080Newcastle Premier League Darts 2026: Luke Littler v Gian van Veen Match, Schedule, Tickets, Odds & Predictions | Darts NewsIND A vs USA T20 World Cup 2026 Live: Where to watch India’s warm-up match todayOne year after Hezbollah ceasefire with Israel, more than 64,000 Lebanese displaced, Israeli attacks on LebanonFAA chief admits failures in fatal mid-air collisionViavi Solutions (VIAV) soars 30% on restructuring plansWest Brom enter race to sign Premier League midfielderThese AI notetaking devices help you record and transcribe your meetingsDocumentary ‘Melania’ surprises Hollywood media with strong box office debutRafah crossing in Gaza reopened, another step for fragile ceasefireDaiwa Securities Q3 FY2025 slides: base revenue up 28%, revenue misses forecastIntesa Sanpaolo SpA reports fourth quarter results; begins the outlook for fiscal year 26NHL fans upset over HC Rick Tocchet’s rationale for little playing time for Flyers star rookieMitchell Marsh embarrasses Pakistan and Bangladesh in reality check as T20 World Cup 2026 drama unfoldsGold, silver plummet as Trump picks Kevin Warsh as Fed chairClient ChallengeBMO and Scotiabank Raise Price Targets for Orla Mining (ORLA)Lewis Hamilton says new look of 2026 F1 car ‘more interesting’ after Ferrari make good start in Barcelona testing F1 NewsIndia’s snakebite crisis kills tens of thousands every year
Two of the biggest names in the world of AI investing are Taiwan Semiconductor Manufacturing(NYSE: TSM) i AMD(NASDAQ: AMD). Each of these stocks had a strong 2025, with AMD up 77% and TSMC up 54%.
However, 2025 is in the past. What matters now is how these stocks will grow over the next five years, as AI spending is expected to grow through at least 2030.
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Does one stock have an advantage over the other? Let’s take a look.
Image source: Getty Images.
While each of these stocks can be labeled a “chip” company, this definition needs further refinement. AMD designs chips that are used in computers, gaming devices and AI graphics processing units (GPU). However, it outsources manufacturing work to different suppliers. TSMC is one such supplier and is used by many of the major computer companies. So a better way to label these companies is to call AMD the chip designer and TSMC the chip maker.
This also leads to each company marketing to a different customer base. TSMC only needs to inform a handful of companies of its capabilities. Because it’s so well-known and widely used, it doesn’t really have to convince any customers of its capabilities; it is already the industry standard.
AMD is different. It faces a lot of competition. Nvidia is currently the king of AI computing hardware, having developed the best technology stack for running AI workloads. In addition, there is increasing competition Broadcom and its custom-designed AI chips, designed specifically for each AI hyperscaler’s workload. AMD is often seen as a third choice, as it hasn’t been a popular choice for almost any AI competitor. AMD has a lot of work to do to catch up with the competition, but management believes it has made the right improvements to make it possible.
AMD management noted that downloads of its GPU control software, ROCm, increased 10x last year through November 2025. This is important because it shows that more developers are looking into cheaper AMD hardware compared to Nvidia’s. Additionally, AMD management believes its data center division can generate a compound annual growth rate (CAGR) of 60% over the next five years, with a company-wide growth rate of 35%. That’s a lofty projection, and if it pans out, AMD could be a great value to own.
TSMC’s management team offers similar guidance. Over the five years starting in 2024 and ending in 2029, AI chips are expected to deliver nearly 60% CAGR, although the company-wide growth rate will be around 25%.
This raises an interesting point of comparison: Would you rather own a stock that isn’t performing as well right now but has greater future potential, or a stock that’s performing great now and is expected to do so in the future but doesn’t have as high a ceiling? That’s the AMD vs. TSMC argument in a nutshell. So which is the best buy?
TSMC takes the cake for me. As long as there is AI spending, TSMC is likely to remain an excellent stock investment. Their chips are among chips designed by Nvidia, Broadcom and AMD, and would probably go into another competitor’s product if there was one. TSMC is about as safe a bet as you’re going to get in the AI realm, making it a great buy.
AMD has a much higher risk with greater uncertainty, but until it starts to show that it can actually deliver the levels of growth it gave in its projections, I’m an AMD skeptic.
As a final nail in the coffin, TSMC’s stock is much cheaper than AMD’s.
At 24 times forward earnings versus 38, TSMC stock is too cheap to pass up on its continued success.
I think TSMC is a safe bet, although AMD can produce superior returns if all goes as management believes. However, I won’t give up 20% or more annual returns for something slightly better, doing that TSMC the best stock pick.
Before you buy shares in Taiwan Semiconductor Manufacturing, consider this:
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Keithen Drury has positions in Broadcom, Nvidia and Taiwan Semiconductor Manufacturing. The Motley Fool has positions in and recommends Advanced Micro Devices, Nvidia and Taiwan Semiconductor Manufacturing. The Motley Fool recommends Broadcom. The Motley Fool has one disclosure policy.
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