What Is 1 of the Best Artificial Intelligence (AI) Stocks to Buy Now?
Key Points
Large tech companies are increasing their investments in artificial intelligence (AI).
Taiwan Semiconductor works with many tech clients across different categories.
TSMC also diversifying geographically, recently opening its first U.S. facility.
- 10 stocks we like better than Taiwan Semiconductor Manufacturing ›
Artificial intelligence (AI) continues to be a force in the stock market, representing a large piece of each of the eight most valuable companies on the market.
There are so many ways to play it, and you don't want your portfolio to have too much exposure to one trend. If you're looking for an excellent AI stock to buy right now, I recommend Taiwan Semiconductor Manufacturing (NYSE: TSM).
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »
Image source: Taiwan Semiconductor.
The behind-the-scenes AI stock
Taiwan Semi manufactures the advanced computer chips that companies like Nvidia and Apple design. It works with a varied client base, and it makes chips for all kinds of technology, like smartphones and autonomous vehicles.
However, it's benefiting as its key clients continue to grow at fantastic rates and invest in new AI technology. When Nvidia fields high demand, for example, that comes back to Taiwan Semiconductor.
And it's showing up in its strong results. In the 2025 third quarter, revenue increased 41% year over year. Gross margin expanded from 57.8% to 59.5%, and operating margin expanded from 49.6% to 50.6%.
One risk with the company has always been that it's based in Taiwan. That's become more apparent in the changing tariff environment, but management had already had an expansion to the U.S. in the works. It recently opened its first U.S. facility in Arizona, where it's producing Nvidia's Blackwell chips, and plans to add more.
This provides a greater margin of safety for this high-growth AI giant, which makes now look like a great time to invest.
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Jennifer Saibil has positions in Apple and Taiwan Semiconductor Manufacturing. The Motley Fool has positions in and recommends Apple, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.
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