We just covered Billionaire Ken Fisher’s Latest Portfolio: 10 Best AI Stocks to Buy. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) ranks #6 (see the 5 Best AI Stocks to Buy).
Billionaire Ken Fisher’s Stake: $5.51 billion
Taiwan Semiconductor’s (NYSE:TSM) moat comes from its leadership in advanced semiconductor manufacturing, where it controls about 70% of the global foundry market and a major chunk of of advanced chip production at 7nm and below, making it the primary manufacturer for key chip designers, including Apple, Nvidia, AMD and Qualcomm. Unlike Nvidia, which designs AI processors, Taiwan Semiconductor (NYSE:TSM) produces the physical chips using extremely expensive fabrication facilities that can cost $15B–$25B each and rely on specialized EUV machines costing about $150M per unit. This business has very high barriers to entry, limiting serious competition mainly to Samsung and Intel. Because chip designs are optimized for a specific manufacturing process, switching foundries involves high cost and risk, strengthening customer lock-in and reinforcing Taiwan Semiconductor’s (NYSE:TSM) long-term competitive advantage.
In smartphones, Taiwan Semiconductor (NYSE:TSM) is the exclusive manufacturer of Apple’s A-series and M-series chips, while supporting 5G adoption and premium device performance. TSMC’s automotive segment is another growth driver. It makes nodes that serve EVs, ADAS, infotainment, and power management systems. The global automotive semiconductor market is projected to grow from $77 billion in 2025 to about $133 billion by 2030. TSM ranks sixth in our list of the best AI stocks to buy according to billionaire Ken Fisher.
Magellan Global Fund explained in its invetor letter why TSMC is well-positioned to benefit from rising compute intensity. (Click here to read the full text).
A semiconductor. Photo by Tima Miroshnichenko on Pexels
While we acknowledge the potential of TSM as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
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