Got $1,000? The Best Pick-and-Shovel Growth Stock for the AI Supercycle Isn't American.

Some of the most advanced artificial intelligence (AI) companies, both public and private, are headquartered in the U.S., including Nvidia, OpenAI, Anthropic, Microsoft, and Palantir. And investors can no doubt benefit from owning shares in many of them.

But there's one AI stock that's not based in the U.S. that looks like a fantastic place to put $1,000 right now. Taiwan Semiconductor Manufacturing (NYSE: TSM), also known as TSMC, is the best pick-and-shovel stock that benefits no matter which AI software companies win in the coming years. Here's why this growth stock more than deserves to be on your buy list.

Image source: Getty Images.

1. Its revenue doubled and earnings surged in 2025

It's easy to find AI stocks with soaring prices and nearly incomprehensible valuations that aren't profitable.

You don't have to worry about any of that with TSMC.

The company's sales doubled last year to $122.4 billion, and its earnings spiked 46% to $10.65 per American depositary receipt. TSMC's impressive results came as demand for its AI chip manufacturing drove AI revenue up 48% from 2024 to $71 billion.

This is the part where I remind you that TSMC benefits from the expansion of artificial intelligence, no matter who's winning. This means that, as Alphabet, Meta Platforms, Amazon, and Microsoft ramp up their capital expenditures to a collective $650 billion this year, TSMC sits back and lets them fight it all out for AI dominance while it reaps the benefits.

2. TSMC holds 70% of the chip manufacturing business

This advantage can be an easy one to overlook, because in the ultra-competitive technology sector, market share can sometimes shift quickly. But that's very unlikely to happen with TSMC, because it has spent years creating a durable moat around its business through its advanced manufacturing prowess.

For example, Samsung and Intel are TSMC's rivals, but their manufacturing processes aren't as advanced as TSMC's and don't have the same high-yield manufacturing rates. And research from Morningstar indicates TSMC can maintain its manufacturing lead because it has close relationships with tech giants and "structural cost advantages."

This means that not only does TSMC have nearly three-quarters of the global manufacturing capacity, but it has also invested in the right technology and is the best at using it to continue making the best semiconductors. That dominance has given TSMC a decades-long lead over its rivals, according to Morningstar.

3. The company could benefit from AI for years to come

TSMC's management says sales will increase 30% this year -- and the company will likely continue growing at a steady pace for years to come.

I already mentioned the AI spending surge that's happening this year from a handful of leading tech companies, and it's worth remembering that the AI race is just a few years old. Imagine the early days of the internet, and trying to figure out what companies would exist in the following decades, and how much money they'd spend on developing new tech. It's difficult to guess what new products AI will help bring about, let alone how much processing may be needed to run them.

For example, the AI inference market -- where AI models are trained to improve decision-making -- is expected to grow from $106 billion today to $255 billion by 2030. Increasing demand for new markets like this could help TSMC churn out advanced processors for years to come.

No AI stock comes with a guarantee, but if you have $1,000 to put toward a dominant tech company that will benefit as long as companies need advanced processors, then Taiwan Semiconductor looks like a no-brainer buy.

Chris Neiger has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, Intel, Microsoft, Nvidia, Palantir Technologies, and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.