We recently compiled a list of 20 AI news stories you may have missed, and in this article, we’ll take a look at how Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) stands out relative to other AI news stories you may have missed.
The AI industry continues to see significant growth, fueled by advances in generative AI, machine learning, and data analytics. Analysts from leading research firms and financial institutions are optimistic about AI’s growth trajectory and predict a sustained expansion beyond 2025. For example, according to Gartner, the AI software market is expected to reach $135 billion by the end of 2025, showing 21% growth over the previous year. This surge is primarily driven by the adoption of AI in various sectors such as healthcare, finance, and retail. McKinsey research similarly indicates that AI could contribute up to $13 trillion to the global economy by 2030, making it a key driver of economic growth.
A Bloomberg report echoes these predictions, highlighting that venture capital investment in AI startups continues to surge even amid a broader tech downturn. In the first half of 2024, more than $40 billion in venture capital was poured into AI-focused companies. Much of this funding is targeted at generative AI, a subfield of AI that has attracted attention for its ability to create human-like text, images and designs. According to a Goldman Sachs analysis, generative AI could boost global productivity by 7% over the next decade and contribute an additional $4.4 trillion to the global economy. Generative AI’s ability to handle complex tasks such as legal document creation and medical diagnoses has experts seeing it as revolutionizing entire industries.
For more on these trends, check out “The 33 Most Important AI Companies to Watch” and “20 Industrial Stocks Already Riding the AI Wave.”
CEOs of major technology companies are now heavily focused on AI development. Satya Nadella has said that AI is the technology that will define our era, highlighting the role that the generative AI tools his company sells, such as Copilot and Azure OpenAI, will play in transforming business processes and increasing productivity. Meanwhile, Sundar Pichai has stressed the importance of establishing responsible AI development, saying that the potential of AI is immense, noting that AI could mean more for human society than electricity or fire. Andy Jassy has argued that with cloud cost optimization programs now largely a thing of the past, companies are turning to invest in generative AI, which is already a multi-billion dollar business.
The story continues
For more on these trends, check out BlackRock’s 30 Most Important AI Stocks and Goldman Sachs’ 10 Unattractive AI Stocks.
Our Methodology
In this article, we have highlighted AI news that is not getting a lot of press, but is important to the AI market, and the companies that are in the news are also popular among hedge funds.
Why are we interested in hedge fund concentrated stocks? The reason is simple: our research shows that you can outperform the market by mimicking the top stock picks of the best hedge funds. Our quarterly newsletter strategy selects 14 small and large stocks each quarter, and has returned 275% since May 2014, beating the benchmark by 150 percentage points (more details here).
A close-up of the complex network of integrated circuits used in logic semiconductors.
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)
Number of hedge fund holders: 156
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) manufactures and sells integrated circuits and semiconductors. Latest reports suggest that the company is manufacturing a small but significant amount of Apple A16 chips, used in the iPhone 14 Pro, 14 Pro Max, 15, and 15 Plus, at its new Arizona fab. Bloomberg reports that once the second stage of the Phase 1 fab at Taiwan Semiconductor Manufacturing Company Limited’s (NYSE:TSM) facility is complete and in production, it will significantly increase production, putting the Arizona project on track to meet its production target for the first half of 2025.
Overall, TSM ranks #12 on our list of AI news you’re probably missing. While we acknowledge TSM’s potential as an investment, we believe some AI stocks have the potential to deliver higher returns in a shorter time frame. If you’re looking for AI stocks that are more promising than TSM but still trade for less than 5x TSM’s earnings, check out our report on the cheapest AI stocks.
Read next: The $30 Trillion Opportunity: The 15 Best Humanoid Robot Stocks to Buy According to Morgan Stanley and NVIDIA Has “Become a Wasteland” According to Jim Cramer.
Disclosures: None. This article was originally published on Insider Monkey.
