Meet the Critical Artificial Intelligence (AI) Chip Stock Your S&P 500 ETF Doesn't Include (but Every Tech Portfolio Needs)

Group 1: Investment Opportunity in TSMC - TSMC is the largest chip manufacturer in the world and plays a crucial role in the advancement of AI technology [6][7] - The company has a significant technological lead, being one of only three manufacturers capable of producing 3 nm chips, which are essential for AI applications [7][8] - TSMC's sales increased by 35% last quarter, with advanced 5 nm and 3 nm nodes accounting for 58% of total revenue, indicating strong demand for AI chips [9] Group 2: Financial Performance and Growth Outlook - TSMC is investing $38 billion to $42 billion in capital expenditures this year, a 34% increase from the previous year, to meet the growing demand for AI chips [11] - The company expects mid-20% revenue growth this year and over 20% average annual revenue growth over the next five years, while maintaining a gross margin above 53% [13] - TSMC shares are currently trading at less than 19 times the analysts' consensus estimate for 2025 earnings, making it an attractive investment compared to the S&P 500's aggregate P/E ratio [12] Group 3: Market Position and Competitive Advantage - TSMC has built a substantial moat that makes it difficult for competitors to gain market share, attracting major clients like Nvidia and Apple [10] - The company is planning to spend $100 billion over the next few years to expand manufacturing capacity in the United States, further solidifying its market position [11] - If included in the S&P 500, TSMC would account for approximately 1.8% of the index, highlighting its significant market capitalization [16]