10 Best Stocks to Buy According to AI Bull Brad Gerstner

7. Taiwan Semiconductor Manufacturing (NYSE:TSM)

Altimeter Capital’s Stake: $370,510,893

Rising demand for chips and tight capacity give Taiwan Semiconductor Manufacturing (NYSE:TSM) a unique position to have pricing power and operating leverage. With an estimated AI CapEx of a whopping $700 billion this year from major hyperscalers and tech companies, TSMC sits at the center of that demand cycle. Taiwan Semiconductor’s moat: Its customers are not willing to leave the company because switching foundries is extremely hard. Taiwan Semiconductor Manufacturing (NYSE:TSM) holds about 62% of the total foundry market and over 90% of the market for advanced nodes (7nm and below).

Apple is a major customer for Taiwan Semiconductor Manufacturing (NYSE:TSM) as the company makes iPhone and Mac chips like the A-series and M-series. Nvidia relies on TSMC for its AI GPUs used in data centers. AMD uses TSMC for CPUs and GPUs. Qualcomm, Broadcom, MediaTek and Marvell also rely on it for production.

Read what a Broadcom executive recently said about the demand TSM is facing here.

Taiwan Semiconductor Manufacturing (NYSE:TSM) has raised its capital expenditure forecast to $56 billion for 2026 and plans $165 billion in US investments over the next few years. Its moat and high-capacity production make it an attractive buy for the long term despite its gains.  The stock trades at a forward P/E of 20x, slightly above its 5-year average of 19x.

Magellan Global Fund stated the following regarding Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) in its fourth quarter 2025 investor letter:

“The largest contributors to the portfolio’s performance over the quarter were Alphabet, Amazon and Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM). TSMC performed strongly, closing at record highs on continued strength in demand for semiconductors, including for AI applications, which CEO C.C. Wei described as “insane”. TSMC, having cemented their dominant position at the leading edge, have begun mass production of 2nm chips using the new Gate All Around transistor architecture during the quarter. We continue to view TSMC as well-positioned to benefit from rising compute intensity, with the market having an increased appreciation of their agnostic position with respect to potential shifts in market share of AI chip designers.”