13 Best Technology Stocks to Buy for Long-Term Investment

2. Taiwan Semiconductor Manufacturing Co. Ltd. (NYSE:TSM)

3-Year Revenue CAGR: 22.32%

Number of Hedge Fund Holders: 186

Taiwan Semiconductor Manufacturing Co. Ltd. (NYSE:TSM) manufactures, packages, tests, and sells ICs and other semiconductor devices. It provides various wafer fabrication processes, such as processes to manufacture complementary metal-oxide-semiconductor logic, mixed-signal, radio frequency, embedded memory, and others.

The company generated $25.78 billion in FQ1 2025 revenue, which was up ~41% year-over-year. 59% of this revenue came from the HPC segment, which itself improved by 7% sequentially due to the sustained demand for AI-related applications. On April 21, Barclays analyst Simon Coles lowered the price target on TSMC to $215 from $255 while keeping an Overweight rating.

The firm believes that the company’s shares are already pricing in a slowdown and look increasingly attractive. TSMC’s FY2025 guidance was also maintained, which could imply some slowdown in H2 of the year. Taiwan Semiconductor Manufacturing Co. Ltd. (NYSE:TSM) forecasts that revenue growth from AI accelerators will reach a mid-40% CAGR for the 5 years starting from 2024.

The company’s results and guidance showcased strong AI chip demand, which is why Sands Capital Technology Innovators Fund stated the following regarding Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) in its Q4 2024 investor letter:

“Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) third-quarter 2024 results and guidance showcased strong continued demand for artificial intelligence (AI) chips. Revenue increased by 29 percent, and earnings saw a 54 percent rise year-over-year. Gross margins were at their highest since 2022, bolstered by price hikes and record utilization at both the 3 nanometer (nm) and 5nm nodes. TSMC’s full-year revenue outlook was revised upward from 25 percent to 30 percent growth. The company also anticipates higher capital expenditure in 2025, a leading indicator for revenue.

Meanwhile, TSMC’s competitive position within the leading-edge chip fabrication industry has improved. The company noted that demand for its next-generation 2nm (N2) node is considerably higher than for its predecessor, N3. Additionally, TSMC has more capacity for N2 than N3. This situation contrasts with Intel and Samsung, which both recently disclosed struggles in ramping up their leading-edge nodes. Together, Intel and Samsung account for approximately $25 billion of foundry revenue, which could potentially migrate to TSMC over time…” (Click here to read the full text)