Arigato Investor wrote a post · Jul 18, 2023 10:50

Don't Overlook TSM

While Nvidia $NVIDIA (NVDA.US)$ may currently be in the spotlight for its advancements in artificial intelligence (AI), astute investors should not overlook Taiwan Semiconductor Manufacturing (TSMC) in the industry.

The surge in Nvidia's stock has caused a ripple effect, boosting chip stocks globally. The reason behind this is quite simple: Nvidia doesn't manufacture its own chips. Instead, it relies on TSMC $Taiwan Semiconductor (TSM.US)$, which is widely recognized as the most advanced chipmaker worldwide, to produce its GPUs.

Nvidia's optimistic forecast for the second quarter has fueled expectations of increased orders with TSMC. As a result, investors have flocked to TSMC shares (ticker: TSM) as a way to capitalize on the growing demand for AI chips. Consequently, the stock has experienced an impressive gain of nearly 50% year-to-date.

TSMC's primary driver of growth lies in high-performance computing. With the U.S. and Chinese internet giants increasingly developing their own cloud computing and AI chips, it is believed that TSMC will benefit from this trend in the coming years.

Investors should keep an eye on TSMC's upcoming earnings announcement scheduled for July 20th. This will provide further insights into the company's growth trajectory.

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