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5 Hedge Fund Favorites with Strong Setup in 2026

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In this article, we will list the 5 Hedge Fund Favorites with Strong Setup in 2026. Please visit 14 Hedge Fund Favorites with Strong Setup in 2026 if you’d like to see an extended list and our methodology behind it.

5. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)

Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) earns a place on our list of the 14 hedge fund favorites with strong setup in 2026.

Photo by Possessed Photography on Unsplash

As of March 30, 2026, Citigroup reaffirmed its “Buy” rating on Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), raising its price target to NT$2,800 from NT$2,600.

After incorporating the company’s growing demand for AI-driven chips in its model, the investment firm boosted its earnings projections through 2028. The $4.08 and $5.18 EPS estimates, set for 2027 and 2028, respectively, are 18% and 28% higher than the Bloomberg consensus. Additionally, the firm projects that Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)’s net profit would increase from roughly $53.7 billion in 2025 to roughly $75.8 billion in 2026, reaching $105.8 billion and $134.2 billion in 2027 and 2028, respectively.

Meanwhile, on March 16, 2026, Bernstein SocGen Group raised the Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)’s price target to $351 from $330, while maintaining an “Outperform” rating. This was due to the ongoing demand for both AI and non-AI products. According to Bernstein, while XPU demand still exceeds capacity and should underpin future growth, AI revenue is expanding beyond XPU into HBM base-die production.

Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is the world’s largest semiconductor foundry and is engaged in the manufacturing and designing of semiconductor chips. These chips are used by companies across several end markets, including personal computers and peripheral products, consumer electronics, wired and wireless communications systems, and automotive and industrial equipment.

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The $250 Trillion AI Hype is Real. A few years from now, you’ll probably wish you’d bought this stock.

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Fast forward a year and Amazon’s new CEO Andy Jassy described generative AI as a “once-in-a-lifetime” technology that is already being used across Amazon to reinvent customer experiences.

At the 8th Future Investment Initiative conference, Elon Musk predicted that by 2040 there would be at least 10 billion humanoid robots, with each priced between $20,000 and $25,000.

Do the math. According to Musk, this technology could be worth $250 trillion by 2040.

Put another way, that’s roughly equal to:

  • 175 Teslas
  • 107 Amazons
  • 140 Metas
  • 84 Googles
  • 65 Microsofts
  • And 55 Nvidias

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  • Bill Gates sees artificial intelligence as the “biggest technological advance in my lifetime,” more transformative than the internet or personal computer, capable of improving healthcare, education, and addressing climate change.
  • Larry Ellison — through Oracle, is spending billions on Nvidia chips and partnering with Cohere to embed generative AI across Oracle’s cloud and apps.
  • Warren Buffett — not known for tech hype — says this breakthrough could have a ‘hugely beneficial social impact.

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