6. Taiwan Semiconductor (NYSE:TSM)
Billionaire Ken Fisher’s Stake: $5.51 billion
Taiwan Semiconductor’s (NYSE:TSM) moat comes from its leadership in advanced semiconductor manufacturing, where it controls about 70% of the global foundry market and a major chunk of of advanced chip production at 7nm and below, making it the primary manufacturer for key chip designers, including Apple, Nvidia, AMD and Qualcomm. Unlike Nvidia, which designs AI processors, Taiwan Semiconductor (NYSE:TSM) produces the physical chips using extremely expensive fabrication facilities that can cost $15B–$25B each and rely on specialized EUV machines costing about $150M per unit. This business has very high barriers to entry, limiting serious competition mainly to Samsung and Intel. Because chip designs are optimized for a specific manufacturing process, switching foundries involves high cost and risk, strengthening customer lock-in and reinforcing Taiwan Semiconductor’s (NYSE:TSM) long-term competitive advantage.
In smartphones, Taiwan Semiconductor (NYSE:TSM) is the exclusive manufacturer of Apple’s A-series and M-series chips, while supporting 5G adoption and premium device performance. TSMC’s automotive segment is another growth driver. It makes nodes that serve EVs, ADAS, infotainment, and power management systems. The global automotive semiconductor market is projected to grow from $77 billion in 2025 to about $133 billion by 2030. TSM ranks sixth in our list of the best AI stocks to buy according to billionaire Ken Fisher.
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.”
While we acknowledge the potential of TSM to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than TSM and that has 100x upside potential, check out our report about the cheapest AI stock.
Click to continue reading and see Top 5 Best AI Stock Picks of Billionaire Ken Fisher.
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