My Favorite Artificial Intelligence Stock to Buy Right Now (Hint: It's Not Nvidia)

Core Viewpoint - Nvidia has become the world's largest company with a market capitalization of $3.48 trillion and has seen a revenue increase of 782% over the last five years, but it may not be a suitable investment at its current high valuation [1][2] Company Analysis - Nvidia designs advanced computer chips for AI but outsources manufacturing to Taiwan Semiconductor Manufacturing Company (TSMC), which is the primary manufacturer of Nvidia's chips [3] - TSMC is currently the only manufacturer capable of producing the most advanced computer chips at scale, holding a significant competitive advantage over other companies like Intel and Samsung [4] - TSMC has a market capitalization that recently surpassed $1 trillion, with revenue of $83.9 billion and operating income of $36 billion over the past 12 months, reflecting steady growth in the advanced semiconductor sector [5] Strategic Developments - TSMC plans to introduce its 2-nanometer node by 2025, reinforcing its monopoly in advanced semiconductors and enhancing its pricing power [6] - To mitigate geopolitical risks associated with its concentration in Taiwan, TSMC is diversifying its supply chain by investing in facilities in the United States, Mexico, Europe, and Japan, which will help grow revenue and reduce risks [7] Investment Potential - TSMC's stock trades at a P/E ratio of 30, comparable to the S&P 500 average, but with significant growth prospects in the advanced semiconductor market [8] - The demand for advanced computer chips is expected to continue rising, driven by major technology companies increasing their investments in chips and data centers, which bodes well for TSMC's revenue growth [9] - TSMC is anticipated to grow its earnings rapidly over the next decade, positioning itself as one of the largest companies globally by market cap, making it an attractive investment for those interested in the AI sector [10]