Nvidia vs. Taiwan Semiconductor Manufacturing: What's the Better Buy?

Core Insights - Nvidia and TSMC are dominant players in the AI value chain, with Nvidia focusing on GPU design and TSMC on chip fabrication and packaging [1][2] Nvidia - Nvidia has visibility into nearly $500 billion in combined revenue from its Blackwell and Rubin platforms from 2025 to 2026, with $150 billion already shipped [4] - The company's networking business is generating multibillion-dollar revenues through products like NVLink, InfiniBand, and Spectrum-X, which are essential for AI deployments [4] - Production of Nvidia's next-generation Vera Rubin platform is on schedule to ramp up in the second half of 2026, supporting various AI workloads [5] - Nvidia's current market cap is $4.6 trillion, with a gross margin of 70.05% and a dividend yield of 0.02% [7] Taiwan Semiconductor Manufacturing (TSMC) - TSMC earns a significant portion of its revenue from producing advanced chips (7-nanometer and below) for high-performance computing [8] - The company is advancing its 2-nanometer process node toward volume production, with plans to produce chips using the N2P variant in 2026 [8] - TSMC is also developing the A16 process node, with volume production scheduled for the second half of 2026 [9] - TSMC plans to increase its monthly Chip on Wafer on Substrate (CoWoS) advanced packaging capacity from 75,000-80,000 wafers to 120,000-130,000 wafers by the end of 2026 [11] - TSMC's current market cap is $1.6 trillion, with a gross margin of 57.75% and a dividend yield of 1.02% [10] Investment Outlook - Nvidia is considered better suited for long-term investors focused on upside potential, while TSMC may appeal to those seeking a more resilient stock [12]