Taiwan Semiconductor Manufacturing Company Limited (TSM) Surges on Accelerated Demand For AI-Related Semiconductors

Sands Capital, an investment management company, released its “Sands Capital Technology Innovators Fund” Q2 2025 investor letter. A copy of the letter can be downloaded here. Technology Innovators focus on pioneering businesses worldwide that serve as key drivers or beneficiaries of significant long-term changes driven by technology. The fund returned 26.0% (net) in the second quarter compared to a 21.9% return for the benchmark, MSCI ACWI Info Tech and Communication Services Index. Easing geopolitical concerns, renewed AI optimism, resilient macroeconomic data, strong corporate earnings, and technical tailwinds boosted the markets for a quick recovery in the quarter. You can check the fund’s top 5 holdings to know more about its best picks for 2025.

In its second quarter 2025 investor letter, Sands Capital Technology Innovators Fund highlighted stocks such as Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM). Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) manufactures, packages, tests, and sells integrated circuits and other semiconductor devices. The one-month return of Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) was 7.85%, and its shares gained 50.74% of their value over the last 52 weeks. On July 24, 2025, Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) stock closed at $241.60 per share, with a market capitalization of $1.253 trillion.

Sands Capital Technology Innovators Fund stated the following regarding Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) in its second quarter 2025 investor letter:

Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), the world’s largest producer of leading-edge logic chips, reported strong quarterly results, supported by ongoing demand for AI related semiconductors. Management reiterated its 2025 revenue growth target in the mid-20 percent range, with second-quarter guidance coming in above consensus. The company plans to double capacity for chip-on-wafer on-substrate (CoWoS) packaging this year, noting that demand continues to exceed supply and capacity remains fully booked. TSMC also reaffirmed its long-term goal to grow AI-related revenue at a mid-40 percent compound annual rate through 2029, reflecting its critical position in the semiconductor value chain and sustained momentum in AI infrastructure buildout.”

Analyst Says Taiwan Semiconductor Manufacturing Company (TSM) Among the Best AI Stocks to Buy on the Dip

A close-up of a complex network of integrated circuits used in logic semiconductors.

Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is in 9th position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 187 hedge fund portfolios held Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) at the end of the first quarter, which was 186 in the previous quarter. 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 the list of AI stocks in the spotlight. Longriver Partners Fund noted Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)in its Q2 2025 investor letter and views it as the lynchpin of the AI compute stack. In addition, please check out our hedge fund investor letters Q2 2025 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.