Prediction: This AI Chip Stock Will Become the Next Nvidia by 2030 | The Motley Fool

Taiwan Semiconductor Manufacturing (TSM +0.34%) is emerging as one of the smartest ways to invest in the artificial intelligence (AI) boom.

Nvidia (NVDA 1.07%) currently accounts for an estimated 85% to 92% share of the AI accelerator market. However, as large cloud companies look to reduce costs and scale faster, many are shifting toward custom chips and more specialized computing systems.

Regardless of which approach gains traction, most advanced AI chips still rely on Taiwan Semiconductor — also known as TSMC — for manufacturing.

Chip manufacturing and packaging bottleneck

With AI infrastructure spending expected to reach around $660 billion in 2026 alone, TSMC is already benefiting from surging demand for advanced chip manufacturing. In the first quarter, the company reported revenue of $35.9 billion, up nearly 39% year over year, while gross margin expanded 3.9 percentage points to 66.2%.

Taiwan Semiconductor Manufacturing

Today’s Change

(0.34%) $1.26

Current Price

$367.50

Key Data Points

Market Cap

$1.9T

Day’s Range

$365.13 – $370.73

52wk Range

$156.00 – $390.20

Volume

9.2K

Avg Vol

13M

Gross Margin

61.02%

Dividend Yield

0.91%

AI is now at the center of TSMC’s business. High-performance computing (HPC), which includes AI-related chips, has grown from about 46% of revenue in the first quarter of 2024 to roughly 61% in the latest quarter.

The expansion of AI infrastructure is increasingly constrained by the ability to manufacture and package advanced chips…