The Motley Fool contributor says he’d choose Taiwan Semiconductor Manufacturing (TSMC) over Advanced Micro Devices (AMD) in 2026, citing P/Es of 26.6 for TSMC and 83.0 for AMD, plus TSMC’s 72.5% foundry share, according to TrendForce. He still holds AMD.
AMD designs processors and accelerators; TSMC manufactures chips for companies that design them. In FY 2025, AMD reported $34.6 billion in revenue and $4.3 billion in net income, with a 12.5% net margin; TSMC reported $122.4 billion in revenue, $55.1 billion in net income and a 45% margin. The valuation figures come from Financial Modeling Prep; the article notes they may differ by provider.
AMD faces competition from Nvidia and Intel, cyclical demand and reliance on a small number of manufacturing partners. TSMC’s risks include the high cost of its factories, the concentration of a significant share of its capacity in one geographic region, and competition from Samsung and GlobalFoundries.
