Giverny Capital Asset Management, LLC, an investment management company, recently published its second-quarter 2026 investor letter. A copy of the letter can be downloaded here. The model portfolio returned 13.70% this quarter, compared to the S&P 500’s 15.20% return. YTD, the portfolio gained 5.89%, while the index increased by 10.21%. The long-term link between stock appreciation and earnings growth is strong; Benjamin Graham described the market as a “voting machine” in the short term and a “weighing machine” in the long term. Despite the S&P 500’s 10.2% rise in the first half of the year, 210 stocks lost value, indicating market anomalies. High-quality earnings compounders that benefit from AI capabilities are likely to maintain their competitive edge. Recently, the market has increasingly chased momentum. Tech giants are taking advantage of the optimism of investors amid fears of an AI bubble. Despite strong profit margins, reliance on “moonshot” investments raises sustainability concerns. The author recommends investing in both emerging tech leaders and established firms. In addition, please check the Strategy’s top five holdings to know its best picks in 2026.
In its Q2 2026 investor letter, Giverny Capital Asset Management highlighted Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM). Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is the world’s leading contract chip manufacturer, producing advanced semiconductors for major global technology companies. On July 20, 2026, Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) closed at $402.30 per share. One-month return of Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) was -4.25%, and its shares gained 78.11% over the past 52 weeks. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) has a market capitalization of $1.86 trillion.
Giverny Capital Asset Management stated the following regarding Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) in its Q2 2026 investor update:
“Our fourth-largest position is Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), which is up nearly 100% since we bought it last summer. TSMC is the primary supplier of leading-edge computer chips for nearly every major technology company, from Nvidia to Broadcom to Apple. Its growth is also accelerating, with June revenue up 68% from a year earlier.”
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is in 6th position on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 234 hedge fund portfolios held Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) at the end of the first quarter, up from 224 in the previous quarter. In Q1 2026, Taiwan Semiconductor Manufacturing Company Limited’s (NYSE:TSM) revenue increased 6.4% (in U.S. dollar terms) sequentially to $35.9 billion, exceeding the guidance. While we acknowledge the risk and potential of Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) and shared L1 Capital International Fund’s views on the company. In addition, please check out our hedge fund investor letters Q2 2026 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
