Taiwan Semiconductor Manufacturing Company Limited, together with its subsidiaries, manufactures, packages, tests, and sells integrated circuits and other semiconductor devices in Taiwan, China, Europe, the Middle East, Africa, Japan, the United States, and internationally. It provides complementary metal oxide silicon wafer fabrication processes to manufacture logic, mixed-signal, radio frequency, and embedded memory semiconductors. The company also offers customer support and engineering services, as well as manufactures masks. Its products are used in high performance computing, smartphone, Internet of things, automotive, and digital consumer electronics. The company was incorporated in 1987 and is headquartered in Hsinchu City, Taiwan.

TSMC remains one of the highest-quality assets in the semiconductor value chain, but its current valuation is already noticeably ahead of its fundamental performance. In terms of profitability, the company looks very strong: ROE of 34.35%, ROA of 24.49%, and ROI of 28.78% are significantly above industry medians, while margins — net margin of 46.46% and operating margin of 53.26% — confirm exceptional operational efficiency. Gross margin of 61.83% is also high and improved over the year, indicating sustained pricing power and a technological advantage. Revenue, gross profit, operating profit, and net profit are all growing consistently year over year, which supports the long-term investment case. The balance sheet looks solid: debt/equity of 0.16, current ratio of 2.49, and quick ratio of 2.31 point to comfortable liquidity and moderate leverage. At the same time, long-term debt remains manageable, while equity and assets are increasing, reducing financial risk. The weak point is the very expensive valuation: P/E of 40.47, P/S of 12.65, P/B of 13.21, and P/FCF of 72.68 are significantly above industry benchmarks, meaning the market is already pricing in a high level of quality and future growth. Dividend yield is practically absent, so investors receive almost all of their return through price appreciation, which increases sensitivity to expectation revisions. The recent dynamics of the multiples do not provide a convincing signal of de-rating: after a brief improvement, they remain at elevated levels again. In this setup, the fundamentals probably justify a sector premium, but not one large enough to aggressively raise the target price. For an investor, this is a story of a strong business with excellent profitability and a solid balance sheet, but with limited re-rating potential due to an already very rich valuation. Therefore, only a moderate conservative downward revision of the forecast is appropriate to account for the stretched multiples and the lack of dividend support.

Taiwan Semiconductor Manufacturing Company Ltd.

Сильный индекс, значительно упал. Оптимистичный взгляд на свои позиции резко сменился на неуверенность.

Strong index, significantly down. An optimistic view of his position suddenly changed to uncertainty.

Сильный индекс, незначительно упал. Рынок не поддерживает быков.

Strong index, slightly down. The market does not support the bulls.

Сильный индекс, значительно вырос. Рынок на стороне медведей.

Strong index, significantly up. The market is on the bears' side.

Сильный индекс, без изменений. Отток средств из лонгов на высоком уровне.

Strong index, flat. Outflow of funds from longs at a high level.

Сильный индекс, без изменений. Приток средств в шорты на высоком уровне.

Strong index, flat. Inflow of funds into shorts at a high level.

TSMC demonstrates outstanding profitability and a strong balance sheet, but trades at a very high premium on valuation multiples, which limits the potential for further valuation upside.

Key Points
Amazon could generate huge growth from its new data center facilities.
Taiwan Semiconductor is making a ton of money from AI demand.
Broadcom anticipates huge growth from its custom AI chip business next year.
There are three companies that are approaching a $3 trillion valuation mark and may reach it before investors know it. While Microsoft (NASDAQ: MSFT) is technically outside the $3 trillion valuation range, it spent significant time being valued above that threshold. The three stocks that I'm focused on are Amazon (NASDAQ: AMZN), Taiwan Semiconductor (NYSE: TSM), and Broadcom (NASDAQ: AVGO). All three of these companies are in striking distance and could breach the $3 trillion mark as soon as 2027 (or maybe even this year).
But which one will get there first? Let's take a look.
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Amazon has a significant head start
The market caps of these three vary widely. Amazon is the closest to $3 trillion with a $2.5 trillion market cap. Taiwan Semiconductor is the next closest at a $2.1 trillion market cap. Broadcom is the furthest away at $1.8 trillion, although it has some tricks up its sleeve to make it seem not so far away from a $3 trillion valuation.
All three of these companies are somewhat related as well, as each is a significant player in the artificial intelligence (AI) build-out.
Amazon may seem like an oddball inclusion in the AI space, as most investors are focused solely on its e-commerce business. Still, the reality is that Amazon Web Services (AWS), its cloud computing business, is a major computing provider for AI firms. Amazon plans to spend around $200 billion on data centers this year to meet rising computing demand. Because it's spending so much on AI computing capacity, investors can expect rapid growth from AWS over the next few years, as new computing capacity increases the amount of revenue the business can generate. This will be exactly what Amazon needs to get to the $3 trillion mark.
Taiwan Semiconductor also has a fairly straightforward path. It's the leading maker of logic chips in the world. As long as companies like Amazon continue to spend heavily on AI computing equipment, its foundry services will be needed. That places TSMC in a perfect spot to benefit, and with its CEO, C.C. Wei, telling investors that he sees strong chip demand lasting through at least 2029 or 2030, there is plenty of growth left for TSMC.
Last is Broadcom. Broadcom entered the AI computing scene with its custom AI chips. These are starting to become a lot more popular, and Broadocm anticipates monster growth throughout the rest of 2026 and into 2027 as those custom AI chips move from the design stage to the production phase. This will lead to the fastest growth rate next year among the three, but is it enough to catch up and beat the others to the $3 trillion point?
All three are well positioned
First, let's see if any company has an out-of-line valuation that must be accounted for.
Although Broadcom is the most expensive, I don't think that's too pricey a valuation for the stock to trade at, and it is reasonable for the growth it expects. On the flip side, TSMC may be the cheapest, but its valuation is right in line with where it has historically traded, and the same can be said for Amazon, too.
As a result, I think stock growth will match business performance, so looking at anticipated growth rates is the best way for investors to project future success. Amazon has the slowest anticipated growth rates, with 15% growth expected this year and 13% next year. Amazon needs to rise 20% to get to the $3 trillion mark in 2027, and that looks well within reach.
Taiwan Semiconductor expects 42% revenue growth this year and 32% next year. With the stock needing to rise about 43% to reach $3 trillion, I think it's also well positioned to hit the $3 trillion mark, perhaps sooner than Amazon.
Broadcom has the longest way to go, needing to grow 67% to reach the $3 trillion mark. However, Wall Street anticipates 66% growth this year and 63% next year, so it easily has the chops to get to $3 trillion.
My guess is that TSMC will reach $3 trillion first, followed by Broadcom, then Amazon, if analyst projections are accurate. However, I think analysts are way undershooting the effect Amazon's new data centers will have on its revenue, and that Amazon will actually get there first despite a slower projected growth rate.
Should you buy stock in Amazon right now?
Before you buy stock in Amazon, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Amazon wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $390,394!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,209,184!*
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Keithen Drury has positions in Amazon, Broadcom, Microsoft, and Taiwan Semiconductor Manufacturing. The Motley Fool has positions in and recommends Amazon, Broadcom, Microsoft, and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Which Company Will Win the Race to $3 Trillion -- Amazon, Broadcom, or Taiwan Semiconductor?

Key Points
Nvidia, Broadcom, and TSMC all look far more attractive than SpaceX.
There is a huge growth catalyst pushing these three higher.
Space Exploration Technologies (NASDAQ: SPCX), better known as SpaceX, went public with a lot of fanfare. In the days following its initial public offering, that appeared to be justified, as the stock skyrocketed.
However, it has since crashed back to Earth and now trades for around $115. The reality is that the stock is trading at levels that aren't supported by its business financials, and there are several more-attractive stocks that investors should consider over SpaceX.
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Three that top my list are Nvidia (NASDAQ: NVDA), Taiwan Semiconductor Manufacturing (NYSE: TSM) (TSMC), and Broadcom (NASDAQ: AVGO). They actually have business fundamentals that support their valuations, and each is growing faster than SpaceX.
SpaceX's valuation is stretched
First, let's look at valuations. As of this writing, SpaceX is about a $1.5 trillion company, while TSMC and Broadcom are slightly larger at $2.1 trillion and $1.8 trillion, respectively. Nvidia is substantially larger at a $5 trillion market cap, but it's still close enough that it's worth comparing.
We don't have any of SpaceX's trailing-12-month results, but we do have 2025 figures. That year, it generated $18.7 billion in revenue, growing 33%, and produced no net income. However, it aims to achieve a 45% net income margin when fully mature. If the company could snap its fingers and instantly achieve that, it would have net income of $8.4 billion.
Now, let's compare those figures to companies that are only slightly larger.
Despite SpaceX being in a similar valuation range with this trio, it's a long way off from generating the same level of profits and revenue. Its closest comparison, Broadcom, has generated more than four times more revenue during the past 12 months than SpaceX did in 2025. While that gap will close when we get SpaceX's trailing-12-month figure in its second-quarter results, it won't close that much.
And Broadcom has a major growth catalyst coming in 2027 with increased custom artificial-intelligence (AI) chip shipments that will cause its revenue to skyrocket next year. Flipping to TSMC and Nvidia, the former has nearly four times the revenue that SpaceX does in profits. Yet TSMC has only a 33% higher valuation. Something is off in that comparison, and it's not TSMC.
Finishing with Nvidia, it's already more than three times larger than SpaceX, but it generates well over 10 times as much revenue. This shows that SpaceX is a bit out of its league in the $1 trillion club, and these three are much better picks.
This trio has an ongoing major growth catalyst
All three of these stocks are heavily involved in the AI building boom. Nvidia makes the most popular computing chips with its graphics processing units (GPUs), and Broadcom is challenging it with custom AI chips. TSMC is a chip manufacturer that fabricates designs from companies like Nvidia and Broadcom, along with many others. As long as the AI boom is full steam ahead, these three will remain great investment options.
Wall Street analysts expect rapid growth from all three of these companies next year. With profit margins likely staying elevated, they will generate far more profits than SpaceX generates revenue. That's a huge distinction, and I think investors should be more focused on investing in companies that have proven profit streams rather than ones that could have profits years down the road.
Nvidia, TSMC, and Broadcom have a generational growth opportunity and are capitalizing on it. SpaceX hasn't quite reached its full-blown space economy aspirations, and there will be plenty of time to invest in it later. The time is now to invest in this trio.
Should you buy stock in Nvidia right now?
Before you buy stock in Nvidia, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Nvidia wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $379,662!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,206,116!*
Now, it’s worth noting Stock Advisor’s total average return is 886% — a market-crushing outperformance compared to 206% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of July 29, 2026.
Keithen Drury has positions in Broadcom, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool has positions in and recommends Broadcom, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

3 Stocks I'm Buying Over SpaceX Right Now

Investors with a higher risk tolerance can pursue stocks with greater upside.
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*Stock prices used were the afternoon prices of July 26, 2026. The video was published on July 28, 2026.
Should you buy stock in Cava Group right now?
Before you buy stock in Cava Group, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Cava Group wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $379,662!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,206,116!*
Now, it’s worth noting Stock Advisor’s total average return is 886% — a market-crushing outperformance compared to 206% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of July 28, 2026.
Parkev Tatevosian, CFA has positions in Eli Lilly. The Motley Fool has positions in and recommends Cava Group, Eli Lilly, and Taiwan Semiconductor Manufacturing. The Motley Fool recommends Upwork. The Motley Fool has a disclosure policy. Parkev Tatevosian is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

4 Stocks That Can 4x Your Money in 4 Years

The 2026 Q2 earnings cycle continues to roll along, with the reporting docket remaining stacked in the coming days and weeks. The period has been another one of positivity so far, with several companies, including Abbott Laboratories ABT, Taiwan Semiconductor TSM, and Johnson & Johnson JNJ all reporting record-breaking results in one way or another.
ABT Shares Bounce Back
Abbott Laboratories posted a double-beat relative to our consensus expectations while also lifting its adjusted EPS guidance. Sales of $12.6 billion reflected an all-time high for the company, growing by a double-digit 13% year-over-year.
The stock has bounced back by 15% over the past month following a weak start in the first half of the year, with the recent set of quarterly results injecting positivity. The post-earnings reaction was the first one of positivity that we’ve seen in recent periods, with the recent earnings upgrade likely to keep momentum positive for the near-term.
Keep in mind that the stock also offers a nice dividend payout, with shares currently yielding 2.4% annually. Payouts have also grown consistently over its history, with ABT not only a Dividend Aristocrat but a Dividend King as well.
TSM Shares Face Volatility
Taiwan Semiconductor, a current Zacks Rank #2 (Buy), has been caught up in the recent weakness we’ve seen among many leading AI-related names, down 14% over the last month overall. It manufactures the powerful chips needed to run next-generation AI technologies.
Sales of $40.2 billion in its recent release grew 33% YoY and reflected a new record, with the company also raising its full-year revenue growth forecast to roughly 40%. TSM’s revenue has melted higher as of late, with the recent $40.2 billion in quarterly sales reported nearly doubling since 2024 Q2.
JNJ Quietly Outperforms
Johnson & Johnson shares have quietly delivered a huge gain in 2026 so far, up nearly 30%. The 3.2% gain over the last month has similarly shown nice outperformance relative to the S&P 500, with the recent results leading to positive momentum post-earnings.
Sales of $25.3 billion reflected a new quarterly record for the company, growing by a solid 6.6% year-over-year. It also increased both its current fiscal year sales and adjusted EPS guidance, with JNJ now on track to meet its 2026 target of more than $100 billion in annual revenue for the first time in its history.
Bottom Line
The 2026 Q2 earnings season continues to roll along, and results have been positive for many companies, including Abbott Laboratories ABT, Taiwan Semiconductor TSM, and Johnson & Johnson JNJ. Not all companies have seen great post-earnings reactions, but the overall earnings landscape remains one of strength.
The 2026 Q2 earnings season continues to roll along, and results have been positive for many companies, including Abbott Laboratories, Taiwan Semiconductor, and Johnson & Johnson. Not all companies have seen great post-earnings reactions, but the overall earnings landscape remains one of strength.
Beyond Nvidia: AI's Second Wave Is Here
The AI revolution has already minted millionaires. But the stocks everyone knows about aren't likely to keep delivering the biggest profits. AI’s second wave is moving from infrastructure to implementation and these companies are at the forefront of this transition, positioned to become what Amazon and Google were to the internet era.
See Stocks Now >>
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

These 3 Companies Reported Record Results and Raised Guidance

Key Points
The chip packaging giant reported impressive earnings, but revenue guidance came in softer than expected.
But margins are going up, as Amkor's high-end, AI-related packaging business continues to grow.
Shares now look cheap again based on the current earnings growth trajectory.
Shares of chip packaging giant Amkor Technology (NASDAQ: AMKR) plunged on Tuesday, down 24.1% as of 2:10 p.m. EDT.
Amkor reported earnings last night, which handily beat expectations. However, forward revenue guidance came in below analyst expectations. The market is in quite an unforgiving mood regarding chip stocks right now, so any slight miss on any particular metric is bound to be met with a big sell-off.
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Still, Amkor plays a vital role in the AI build-out, with long-term partnerships with Taiwan Semiconductor Manufacturing (NYSE: TSM) and Nvidia (NASDAQ: NVDA). Therefore, the sell-off could make for a prime buying opportunity.
Amkor blows out the quarter, but a memory crunch looms for its biggest segment
In the second quarter, Amkor grew revenue 26% to $1.90 billion, with earnings per share rising 218.2% to $0.70. Both figures were well ahead of analysts' expectations of $1.82 billion and $0.48, respectively.
Yet while the quarter topped expectations by a fair amount, forward guidance left something to be desired, at least on the revenue front. Amkor guided to Q3 revenue of $1.95 billion to $2.05 billion, below analysts' expectations of $2.11 billion.
Given the big run-up in the stock over the past year, it's perhaps not a surprise that the stock sold off on that "weak" guidance. However, looking under the hood, Amkor's AI growth story remains intact.
The bull case for Amkor
It should be noted that, even though Amkor's revenue guidance came in light, the company's gross margin guidance of 18.5% to 19.5% was well above analysts' expectations of 16.4%, and EPS guidance was $0.72 to $0.82, well ahead of analysts' estimates of $0.63.
The higher margins are due to Amkor's high-end packaging within its Computing segment, which encompasses AI systems. That segment appears to be going strong, but the Communications segment, which includes smartphones and tablets, is expected to decline in the high single digits on a sequential basis this quarter. This is due to the memory supply crunch, which the company expects will affect smartphone unit sales. Given that the Communications segment accounted for 42% of revenue last quarter, it's perhaps no surprise that its weakness is offsetting the strong growth in data center revenue.
But eventually, the memory supply crunch will ease; meanwhile, AI-related compute looks to be a strong long-term growth trend. That makes Amkor look like a long-term buy on this semiconductor sector sell-off.
Should you buy stock in Amkor Technology right now?
Before you buy stock in Amkor Technology, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Amkor Technology wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $379,662!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,206,116!*
Now, it’s worth noting Stock Advisor’s total average return is 886% — a market-crushing outperformance compared to 206% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of July 28, 2026.
Billy Duberstein and/or his clients have positions in Taiwan Semiconductor Manufacturing. The Motley Fool has positions in and recommends Nvidia and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Why Amkor Plunged Today

The astonishing rally of the artificial intelligence (AI) trade has been suffering from persistent volatility over the past month. Massive AI-related capital expenditure by major hyperscalers raised concerns about its monetization in the future.
Moreover, extremely overstretched valuation of these stocks, unabated inflationary pressure due to fluctuations in crude oil prices resulting from geopolitical conflicts in the Middle East and growing expectations of a 25-basis point hike in the benchmark interest rate by the Fed in September are the primary reasons for recent AI trade volatility.
However, we have selected three AI chip and memory giants that have flourished year to date. These stocks are set for a big upside in August supported by their current top Zacks rank. The stocks are: Micron Technology Inc. MU, Intel Corp. INTC and Taiwan Semiconductor Manufacturing Co. Ltd. TSM. Each of our picks currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The chart below shows the price performance of our three picks year to date.
Image Source: Zacks Investment Research
Micron Technology Inc.
Micron witnessed a meteoric rise in its stock price in the first half of 2026, rallying nearly 340%. However, the recent softness in the stock price has opened a tremendous opportunity for both short and long-term investors.
MU has been benefiting tremendously from the enormous application of AI in day-to-day life, which has pushed up the demand for memory chips. Flash memory technologies like DRAM and NAND are used in AI chips, enabling them to perform optimally.
This has pushed up the demand for AI-enabled memory chips. A huge shortage of memory and storage chips, has resulted in soaring prices of these products. Consequently, MU benefits significantly. The industry’s supply shortage is likely to persist till 2028.
New Tech Trends to Drive Prospects
The performance of any AI model depends on memory performance and capacity. MU’s HBM is a highly sought-after product for major hyperscalers for their AI-enabled chipsets. On July 8, Reuters reported that Micron has decided to invest more than $250 billion in the United States through 2035.
Moreover, MU also unveiled its plan to invest $3 billion in GlobalWafers' silicon wafer manufacturing operations in Texas. The two companies plan to enter a 10-year deal to ensure a long-term supply of raw silicon wafer capacity to the AI memory chip behemoth.
Solid Estimate Revisions
Micron has an expected revenue and earnings growth rate of more than 100% each, for the current year (ending August 2026). The Zacks Consensus Estimate for the current year’s earnings has improved 13.1% over the last 30 days.
MU has an expected revenue and earnings growth rate of 91.4% and more than 100%, respectively, for the next year (ending August 2027). The Zacks Consensus Estimate for next year’s earnings has improved 23.4% over the last 30 days.
Massive Price Upside Potential
The short-term average price target of brokerage firms represents an increase of 66.4% from the last closing price of $900.20. The brokerage target price is currently in the range of $470-$2,000. This indicates a maximum upside of 122% and a maximum downside of 47.7%. The risk/reward ratio is a highly favorable 1:2.56.
Intel Corp.
Intel remains focused on strengthening its capabilities in AI infrastructure, enterprise computing and advanced manufacturing through product innovation and continued ecosystem development.
INTC is making measurable progress in data center processors and purpose-built silicon, which is important as AI infrastructure demand broadens beyond GPUs into CPUs, connectivity and custom compute.
Xeon 6 Clearwater Forest, built on Intel 18A, was described as the fastest-ramping server product in its history. INTC also cited strong hyperscale and enterprise demand, new long-term agreements and improved server CPU industry expectations for 2026 and 2027.
Carving a Niche in AI Ecosystem
Intel's AI PC and edge strategy is gaining traction as AI workloads move closer to the device and enterprise customers seek more efficient local processing. INTC is building a broader AI infrastructure platform that includes CPUs, ASICs, graphics, networking and advanced packaging. This is important because customers are increasingly designing workload-specific systems rather than relying on a single compute architecture.
Solid Estimate Revisions
Intel has an expected revenue and earnings growth rate of 14.9% and more than 100%, respectively, for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 0.9% over the last seven days.
INTC has an expected revenue and earnings growth rate of 13.2% and 40.8%, respectively, for the next year. The Zacks Consensus Estimate for next year’s earnings has improved 3.4% over the last 30 days.
Strong Price Upside Potential
The short-term average price target of brokerage firms represents an increase of 17.3% from the last closing price of $91.67. The brokerage target price is currently in the range of $45-$200. This indicates a maximum upside of 118.2% and a maximum downside of 50.9%. The risk/reward ratio is a highly favorable 1:2.32.
Taiwan Semiconductor Manufacturing Co. Ltd.
Taiwan Semiconductor — the largest dedicated integrated circuit foundry of AI-based chips for the world’s best AI chipset developers — has been experiencing solid demand for its advanced technologies, such as 3-nanometer (nm) and 5nm.
The growing adoption of its multi-project wafer processing service, which allows customers to reduce mask costs, is driving its customer momentum. Demand for advanced manufacturing capacity continues to outpace supply, allowing TSM to benefit from favorable pricing, exceptional capacity utilization, and expanding profit margins.
Robust Business Execution
TSM’s high-performance computing revenues accounted for 66% of total revenues and increased 20% sequentially in the last reported quarter. This reflects sustained demand tied to AI and data-center computing. TSM expects continued strong demand for leading-edge technologies, including a steep increase in 2-nm production during the third quarter of 2026.
Moreover, TSM announced an additional $100 billion investment plan for its Arizona fabrication plants, for a total of $265 billion. This indicates TSM’s confidence that the AI boom will continue, and for that, management is not hesitating to expand its capacity. This additional investment will be utilized for 2-nanometer and below production along with advanced packaging.
Solid Estimate Revisions
Taiwan Semiconductor has an expected revenue and earnings growth rate of 35.1% and 53.4%, respectively, for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 0.9% over the last seven days.
TSM has an expected revenue and earnings growth rate of 29.2% and 27%, respectively, for the next year. The Zacks Consensus Estimate for next year’s earnings has improved 1% over the last seven days.
Excellent Price Upside Potential
The short-term average price target of brokerage firms represents an increase of 25.1% from the last closing price of $399.09. The brokerage target price is currently in the range of $330-$650. This indicates a maximum upside of 62.9% and a maximum downside of 17.3%. The risk/reward ratio is a highly favorable 1:3.64.
Beyond Nvidia: AI's Second Wave Is Here
The AI revolution has already minted millionaires. But the stocks everyone knows about aren't likely to keep delivering the biggest profits. AI’s second wave is moving from infrastructure to implementation and these companies are at the forefront of this transition, positioned to become what Amazon and Google were to the internet era.
See Stocks Now >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

3 AI Chip and Memory Behemoths to Buy Ahead of August for Big Upside

NVIDIA Corporation NVDA has delivered muted gains this year, up only 10.9% despite posting encouraging quarterly results. This is primarily because after several years of exceptional gains, investors’ expectations have become exceptionally high. Consequently, even upbeat quarterly results have not been able to drive the stock significantly higher.
NVIDIA’s state-of-the-art Blackwell chips and CUDA software platform fueled its exceptional growth. However, investors are increasingly questioning whether NVIDIA can remain the market leader as competition intensifies from rivals like Advanced Micro Devices, Inc. AMD. Moreover, any slowdown in AI infrastructure spending by hyperscale cloud providers could weigh on NVIDIA’s margins. U.S. controls on the sale of cutting-edge artificial intelligence (AI) chips to China have already limited NVIDIA’s access to an important market, creating pressure on margins.
The ongoing geopolitical uncertainties have also made investors cautious about investing in large-cap AI stocks, including NVIDIA. The company’s heavy dependency on Taiwan Semiconductor Manufacturing Company Limited TSM for chip production has heightened concerns about potential supply-chain disruptions. Additionally, NVIDIA’s current lofty valuations have left little room for multiple expansion, prompting some investors to remain cautious despite its strong operating performance.
Although NVIDIA’s amazing rally seems to have run its course for new investors, the broader AI ecosystem continues to offer compelling growth opportunities. They may consider AI infrastructure player Western Digital Corporation WDC, known for supplying enterprise storage solutions for AI workloads. Its shares have soared 201.8% so far this year and appear well positioned to extend its rally. Let’s explore why Western Digital could be the next standout performer –
WDC’s AI Storage Boom Could Drive the Next Leg Higher
An increase in demand for Western Digital’s high-value enterprise hard disk drives (eHDDs) and a favorable pricing environment have helped the company post revenues of $3.34 billion in the fiscal third quarter of 2026, up 45% year over year, per the press release.
Most importantly, revenues are expected to improve to about $3.65 billion, plus or minus $100 million, in the fiscal fourth quarter of 2026, a telltale sign that demand for AI infrastructure remains strong, as enterprises and cloud providers continue to expand storage capacity to accommodate growing AI workloads.
For the fiscal fourth quarter, Western Digital further expects non-GAAP gross margin to reach 51-52%, up from 50.5% in the fiscal third quarter. The expected margin expansion should strengthen the company’s profitability and provide additional financial resources to fund long-term growth initiatives.
Therefore, strong demand for AI infrastructure, revenue growth, and expanding margins would propel Western Digital’s stock higher in the near term. Thus, the company’s expected earnings growth rate for the current year is a solid 104.3%. The Zacks Consensus Estimate of $10.07 for WDC’s earnings per share is up 54.9% year over year.
Image Source: Zacks Investment Research
Brokers also remain optimistic about Western Digital’s growth outlook, with the average short-term price target for WDC stock at $638.27, representing a 14.3% upside from its last closing price of $558.30. The highest price target stands at $1,050, suggesting a potential upside of 88.1%.
Image Source: Zacks Investment Research
Western Digital currently has a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks Rank #1 stocks here.
Zacks' Research Chief Names "Stock Most Likely to Double"
Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.
This top pick is a little-known satellite-based communications firm. Space is projected to become a trillion dollar industry, and this company's customer base is growing fast. Analysts have forecasted a major revenue breakout in 2025. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Hims & Hers Health, which shot up +209%.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Missed NVIDIA? This AI Infrastructure Stock Has More Room to Run

Key Points
Taiwan Semiconductor is a critical part of the AI build-out.
More data centers will boost TSMC's business.
Taiwan Semiconductor (NYSE: TSM) is among the top stocks in the artificial intelligence (AI) sector. It has a pretty clear bull case: Build more data centers. With its market dominance in the chip space, it doesn't really matter whose computing units are going into these data centers; all that matters is that more of them are being built, and its chips are likely behind every computing process going on inside of them.
That's an incredible position to be in. It also gives TSMC unparalleled vision into the future, as its clients are attempting to project demand to TSMC as best they can, so it has the required production capacity available when the actual demand arrives. So when Taiwan Semiconductor announced another $100 billion investment in building out U.S. production facilities, it's a clear sign that there's more growth to come.
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Taiwan Semiconductor is still a great investment at these prices
During Taiwan Semiconductor's second-quarterearnings call management announced an additional $100 billion investment into the company's Arizona facility, which helps answer two major questions.
First, it addresses one of the biggest fears surrounding TSMC: Its location. The relationship between Taiwan and mainland China is very complex, and military action is always a threat. This is a major risk investors must consider, and any conflict could spiral into a major war, which would drag the world's markets down. However, by diversifying its production facilities into the U.S., TSMC is eliminating the risk of a single point of failure, which gives investors more confidence in the long-term viability of its stock.
The second item is the long-term health of the AI industry. The worst thing Taiwan Semiconductor could do is overbuild production capacity and have no use for it a year or two later, as it would eat into margins and not provide an ample return on investment. However, CEO C.C. Wei told investors that he believes AI chip demand will remain strong through 2029 or 2030, and he believes there is currently a birth of a new industry ongoing. That could lead to elevated long-term demand, making TSMC a great stock pick.
Despite Taiwan Semiconductor being the primary logic chip foundry for nearly every computing company, the stock trades at an attractive 25 times forward earnings.
With strong growth ahead for Taiwan Semi, I think it's a smart AI stock to buy and hold now, as it allows investors to capitalize on increasing AI build-outs without needing to pick a single winner.
Should you buy stock in Taiwan Semiconductor Manufacturing right now?
Before you buy stock in Taiwan Semiconductor Manufacturing, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Taiwan Semiconductor Manufacturing wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $377,990!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,269,518!*
Now, it’s worth noting Stock Advisor’s total average return is 896% — a market-crushing outperformance compared to 206% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of July 27, 2026.
Keithen Drury has positions in Taiwan Semiconductor Manufacturing. The Motley Fool has positions in and recommends Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Taiwan Semiconductor's Latest Move Shows It's a Screaming Buy

Key Points
Alphabet's cloud revenue increased 82% year over year in the second quarter, driving a fantastic quarter all around.
Amazon's chips business on its own would be one of the three largest in the world.
Taiwan Semiconductor Manufacturing is investing $265 billion in its Arizona location to meet rising demand.
Chip stocks have been plummeting lately as investors pocket high gains. It's been good for several years now, and between high spending and high valuations, there are fears about what happens next. Chip stocks often move in cycles, and if this is the end of a supercycle, investors don't want to lose out.
But not all chip stocks respond the same way to a sell-off, and some chip stocks have more long-term prospects than others. Some are also priced to buy, while others are priced for perfection.
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Nvidia, for example, isn't my favorite chip stock to buy right now. Although it continues to grow at fantastic rates, other chip stocks might be gaining ground. Nvidia also might have a ceiling on gains, since it's already valued at more than $5 trillion.
Instead, as chip stocks fall, I'd load up on Alphabet (NASDAQ: GOOG)(NASDAQ: GOOGL), Amazon (NASDAQ: AMZN), and Taiwan Semiconductor Manufacturing (NYSE: TSM). Here's why.
1. Alphabet
Warren Buffett and Greg Abel have been piling into Alphabet stock, and the cloud and search powerhouse just plunged to its cheapest level in more than a decade. The market didn't like its artificial intelligence (AI) spend guidance for the year at $205 billion, topping even AI giant Amazon's $200 billion spend.
That reaction completely ignored Alphabet's outstanding second-quarter performance and advances in AI. Revenue increased 24% year over year, with a whopping 82% increase in cloud revenue, while operating income was up 30%.
It has a cloud backlog of $514 billion, and 2.4 million people use its Antigravity agentic AI development platform. Some 90% of Fortune 100 companies use its Gemini Enterprise platform, and there's been a 40% increase in daily active users making video since the company upgraded the Gemini app in May. Alphabet deserves some credit for demonstrating these kinds of results, and some confidence that it can ramp up AI successfully.
One of the features I love about Alphabet, and that Buffett likely does, too, is its diversified revenue streams. It has a chip business with its Tensor Processing Units (TPU), but that's just a part of its AI business. And AI is just a part of its broader tech business, which includes a highly dominant search engine, YouTube, Android, and much more.
Trading at 16 times trailing 12-month earnings, it looks priced to buy.
2. Amazon
I have a similar argument for Amazon. CEO Andy Jassy said that as a stand-alone business, its chip business has a $50 billion run rate and is one of the three largest chip businesses in the world. However, the market is worried about the company's spending and whether or not it's going to pay off, and Amazon stock is trailing the S&P 500 this year.
However, signs are pointing to the spend paying off. The company is reporting excellent growth, and management says that it will take some time until it's monetizing its spend at rates that outpace its near-term investing. However, revenue is increasing at high rates -- 17% year over year in the second quarter, with a 28% increase in cloud revenue, the highest in 15 quarters.
Like Alphabet, Amazon has a wide array of revenue streams beyond chips and AI, like e-commerce and streaming. That protects it from volatility in AI or its chips business. And Amazon stock is also trading at a low price, 28 times trailing 12-month earnings, just off a 10-year low.
3. Taiwan Semiconductor Manufacturing
Taiwan Semiconductor Manufacturing (TSMC) makes the chips that its clients design, and it works with all of the top chip companies, including Nvidia, Alphabet, and Amazon. TSMC is demonstrating robust growth, including a 34% year-over-year sales increase in the second quarter, and profitability has been soaring; operating margin expanded from 49.6% to 60.3%.
TSMC is also building out rapidly to meet rising demand. As all of its clients grow at breakneck speed, the company can barely keep up with them. It recently opened a U.S. location in Arizona, and it's heavily investing there, expecting to spend $265 billion on the campus. Management also raised its capital expenditure outlook for the year as it races to fill demand, and it doesn't anticipate any bottlenecks for the next few years.
Since TSMC works with many different clients and in a large range of technologies, it's not actually tied to the AI supercycle, even though that's what's driving growth right now. That gives the company healthy longevity prospects beyond current trends, which is why it's such a strong long-term choice.
However, the stock fell after its recent earnings report. While it's not at its cheapest levels, trading at a P/E ratio of 29, TSMC is worth some premium for its nearly fail-proof model.
Should you buy stock in Alphabet right now?
Before you buy stock in Alphabet, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Alphabet wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $377,990!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,269,518!*
Now, it’s worth noting Stock Advisor’s total average return is 896% — a market-crushing outperformance compared to 206% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of July 26, 2026.
Jennifer Saibil has positions in Taiwan Semiconductor Manufacturing. The Motley Fool has positions in and recommends Alphabet, Amazon, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

My 3 Favorite AI Stocks to Buy During the Chip Sell-Off, and Why Nvidia Isn't the Top Pick.

Key Points
Broadcom and Nvidia should benefit from increased orders.
Celestica and Lumentum are two important Alphabet suppliers.
The big three DRAM chip makers are set to benefit from Alphabet's rising spending.
Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG) continues to ramp up its artificial intelligence (AI) infrastructure spending, once again increasing its 2026 capital expenditure (capex) budget when it reported its Q2 earnings. It is now looking to spend between $195 billion and $205 billion building out AI data centers, up from earlier projections of between $180 billion and $190 billion. On top of that, it plans to significantly increase capex next year.
That type of spending will help drive growth at various AI infrastructure companies, both this year and next. Let's look at eight AI infrastructure stocks that should directly benefit from this increased spending.
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Broadcom
As the co-developer of Alphabet's tensor processing units (TPUs), which are designed for specific AI tasks, Broadcom (NASDAQ: AVGO) is poised to be one of the biggest beneficiaries of the company's increasing infrastructure spending. It manages the physical design and handles the supply chain for these custom AI ASICs (application-specific integrated circuits), and is the one that records the revenue when they are delivered. In addition, Broadcom also has a large networking business that will benefit from Alphabet's AI data-center spending.
Celestica
Celestica (NYSE: CLS) is Alphabet's main hardware integration partner. It makes custom printed circuit boards (PCBs) and builds the physical server enclosures for Alphabet's systems. It also connects the server trays into racks and provides network switches that help handle traffic between TPU pods. Celestica's top three hyperscaler customers make up more than 50% of its revenue, with Alphabet believed to be its largest customer (at about 28% of total revenue in Q1).
Lumentum
Unlike traditional data centers that convert light back into electrical signals to route data, Alphabet's TPU architecture uses direct optical circuit switches (OCS). By keeping the data entirely in the form of light, Alphabet reduces both power consumption and latency. Lumentum (NASDAQ: LITE) benefits from this as it is just one of only two global suppliers that can produce the high-speed 200G laser chips (EMLs) that generate these light signals at scale.
Nvidia
While much of Alphabet's spending will go toward custom TPUs, it also buys Nvidia's (NASDAQ: NVDA) graphics processing units (GPUs), as well. While TPUs are very good for things like pre-training and inference, GPUs are often better at things like research, custom kernels, sparse models, and many small models. This means Nvidia will still get a slice of this larger spending pie. It also likely ups the ante for other hyperscalers, which are likely to follow in Alphabet's footsteps and raise their own capex budgets in response.
SK Hynix, Samsung, and Micron
With increased spending on TPUs and GPUs will also come the need for more high-bandwidth memory (HBM). HBM is a special form of DRAM (dynamic random access memory) that is packaged with these chips to optimize their performance. Samsung (OTC: SSNLF) is the primary HBM supplier for Alphabet, where it works directly with Broadcom. According to reports, it supplies more than 60% of Alphabet's HBM needs for its TPUs. The rest is largely provided by SK Hynix (NASDAQ: SKHY). The Korean company is also the main HBM supplier for Nvidia's GPUs.
Although Micron (NASDAQ: MU) isn't a big Alphabet HBM supplier, it likely provides the company with other solutions, like high-density enterprise solid storage devices (eSSDs) for Google Cloud storage and DDR5 server DRAM.
More HBM demand will also help keep overall DRAM prices high, which has been fueling revenue and gross margin gains at the big three DRAM makers.
Taiwan Semiconductor Manufacturing
Any increase in spending on advanced logic chips generally benefits Taiwan Semiconductor Manufacturing (NYSE: TSM). The company has a near monopoly on advanced logic chip manufacturing, and while Alphabet has reportedly placed a 3 million TPU order with rival Intel, the Taiwanese foundry is still making the vast majority of TPUs. It also provides the chip-on-wafer-on-substrate (CoWoS) advanced packaging that bonds HBM to the TPU die.
Should you buy stock in Broadcom right now?
Before you buy stock in Broadcom, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Broadcom wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $377,990!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,269,518!*
Now, it’s worth noting Stock Advisor’s total average return is 896% — a market-crushing outperformance compared to 206% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of July 26, 2026.
Geoffrey Seiler has positions in Alphabet and Broadcom. The Motley Fool has positions in and recommends Alphabet, Broadcom, Celestica, Intel, Lumentum, Micron Technology, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Taiwan Semiconductor Manufacturing Company Ltd.

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