These 2 Billionaires Just Bought My Favorite Artificial Intelligence (AI) Stock

Company Overview - Taiwan Semiconductor Manufacturing Company (TSMC) is the world's largest third-party chip foundry, producing advanced chips for major technology companies like Apple and Nvidia [4] - TSMC's success is attributed to its culture of continuous innovation and the ability to produce chips with smaller process nodes, enhancing performance and energy efficiency [5] Technological Advancements - The current leading technology in chip manufacturing is the 3-nanometer (3nm) process node, which has significantly contributed to TSMC's revenue growth [6][7] - TSMC is preparing to produce 2-nanometer (2nm) chips by 2025, with expectations of higher revenue contributions due to early demand from clients [8] Financial Performance - In Q3 2023, TSMC reported a revenue growth of 39% in New Taiwan dollars, translating to 36% in U.S. dollars, with earnings per share (EPS) increasing by 54% [10] - Analysts project a revenue increase of 25% and a 26% rise in EPS for 2025, driven by AI demand and investments in new chip technologies [10] Investment Case - TSMC's stock is trading at a price-to-earnings (PE) ratio of 20.39 for 2025 earnings, considered a reasonable valuation given its growth potential [11][12] - The company's strong position in chip manufacturing technology and the backing of significant investments from billionaire hedge fund managers reinforce the investment thesis [12]