Key Takeaways
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Taiwan Semiconductor Corporation (TSMC) is emerging as a key player in the AI sector, progressively gaining market share.
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Nvidia maintains a promising growth forecast, and the upcoming Rubin chips are anticipated to bolster TSMC’s position further.
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Despite TSMC’s impressive performance in 2025, its stock is still considered a solid investment.
There’s something invigorating about the start of a new year. It’s like a chance for a fresh outlook, especially when it comes to reshuffling your stock portfolio.
As we swing into 2026, Artificial intelligence (AI) remains a significant point of discussion, much like the previous years. Even with all the excitement and rising stock values, certain AI stocks still present good value today.
Where should you invest $1,000 right now? Our team of analysts has discovered what they consider the best 10 stocks to purchase now. Find out more
Taiwan Semiconductor Manufacturing (NYSE: TSM) showed impressive performance in 2025, with its stock price climbing over 50%. It might just be one of the best AI stocks to consider buying this January. Here’s why its value could still rise.
Taking Charge of Market Share in the AI Era
In the realm of electronic devices, data centers utilize microchips to integrate AI into smartphones. Prominent companies, like Nvidia and Advanced Micro Devices, design these chips but often turn to specialized foundries like TSMC for production.
TSMC is arguably the largest foundry globally and has a commanding presence in the market. According to Counterpoint Research, by the end of Q3, TSMC held about 72% of the global foundry market share, with Samsung trailing significantly at just 7%.
It’s noteworthy that TSMC is actually expanding its market share amidst the current AI investment wave, even as the demand for AI chips skyrockets. Projections suggest its market share might be around 65% by mid-2024.
Manufacturing chips is no small feat. Considering the financial stakes involved, with AI investments hitting hundreds of billions, chip firms are gravitating toward TSMC due to its superior scale, advanced equipment, and proprietary processes.
Nvidia’s Rubin Chips Are on the Horizon
Nvidia, a frontrunner in AI technology, collaborates closely with TSMC on GPUs, including both the Hopper architecture and the upcoming Blackwell. The excitement is building around Nvidia’s Rubin architecture, which is slated for release in 2026.
TSMC is set to produce Rubin using a cutting-edge 3-nanometer process to enhance performance while reducing energy use. Nvidia recently highlighted a staggering $500 billion in orders, indicating substantial potential for ongoing growth.
Nvidia’s successes have positively influenced TSMC’s revenue, which has seen significant acceleration in recent years. Curiously, it’s worth noting that TSMC is currently Nvidia’s largest supplier.
Impressive Growth at a Reasonable Price
Unless there’s a sudden downturn in AI spending, Nvidia’s substantial order backlog should drive TSMC’s business to new heights as these orders are processed. Good news for investors—TSMC’s stock still seems to have room for an upward trajectory.
The price-to-earnings ratio is about 30 times TSMC’s profit expectations for 2025. That might appear steep, but, as mentioned earlier, TSMC’s growth outlook remains bright. Analysts are predicting an average profit increase of roughly 29% annually over the next few years.
When considering the price-to-earnings growth ratio (PEG), TSMC’s ratio of around 1 suggests that its shares are appealing at this price point. Personally, I often look for stocks with a PEG ratio close to 2-2.5, and TSMC fits the bill as a leading chip foundry.
Even if TSMC’s growth isn’t quite as robust as analysts forecast, investors still stand a good chance to achieve notable returns in the long run. The firm’s crucial role in the AI boom has set a relatively high floor for its stock, alongside potential for growth heading into January.
Should You Consider Buying TSMC Stock Now?
Before diving into Taiwan Semiconductor Manufacturing stock, it’s wise to reflect on the following:
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