Motley Fool writer Keithen Drury recommends Taiwan Semiconductor as an AI-linked investment, citing its 72.5% Q2 revenue share of the chip-fabrication market and a planned extra $100 billion investment in Arizona; he says the stock is reasonably priced.
TSMC fabricates chips designed by Nvidia, AMD and other companies. Drury argues it could benefit even if AI-accelerator market share shifts to alternatives such as Broadcom's custom chips. The additional Arizona investment brings the campus capital-expenditure plan to $265 billion. Nvidia management projects AI-hyperscaler spending of $1.3 trillion next year, up from nearly $800 billion this year, and global data-center spending of $3 trillion to $4 trillion by 2030.
Drury cites valuations of 26 times forward earnings and 20 times next year's expected earnings to support his view that the shares are reasonably priced. The article discloses that he owns TSMC shares and that The Motley Fool holds and recommends the company. Taiwan Semiconductor was not among the Stock Advisor team's 10 stocks it named as its best buys.
