The Motley Foolยท2025-11-03 09:48Core Insights - Global data center investments are projected to approach $7 trillion over the next five years, with a significant portion directed towards AI data centers [1][9] - Taiwan Semiconductor Manufacturing Company (TSMC) is positioned for substantial growth due to its leading role in manufacturing AI chips for major companies like Nvidia [4][11] Industry Trends - Companies have already invested hundreds of billions in data centers, indicating a sustained trend that will likely continue for several years [2] - The AI data center boom has coincided with TSMC's revenue nearly doubling to $25.5 billion over the past three years [4] Company Performance - TSMC has increased its market share significantly, maintaining a dominant position among foundries, particularly in the AI chip sector [3][5] - TSMC's competitive advantage lies in its production capacity, equipment, and expertise, allowing it to efficiently produce complex chips [5][6] Financial Outlook - Wall Street analysts estimate TSMC's earnings will grow by an average of 29% annually over the next three to five years, with the stock currently trading at a price-to-earnings ratio of 31 [11] - The PEG ratio of TSMC is just under 1.1, suggesting the stock is undervalued relative to its anticipated earnings growth [12]