Will Taiwan Semiconductor Be Worth More Than Nvidia by 2030?

Taiwan Semiconductor (NYSE: TSM) has emerged as one of the most important players in artificial intelligence (AI). While it's not developing exciting AI capabilities like Nvidia (NASDAQ: NVDA) or Palantir Technologies, it plays a major part in the process, manufacturing the high-end chips that its clients design and that AI software players depend on.

It works with a laundry list of the top AI companies, so its shareholders profit from all of their successes. And it produces chips for all kinds of uses beyond AI and data centers, so it enjoys a wide array of growth drivers.

After TSMC released its first-quarter results last week, the stock jumped far enough to lift it into the No. 7 spot on the list of the most valuable companies in the world, with a market cap of $1.9 trillion. That's still well behind the No. 1 company, Nvidia, which is worth $4.9 trillion. But could TSMC continue to climb and surpass Nvidia by 2030?

Image source: The Motley Fool.

The $4.8 trillion opportunity

Different research firms see different market opportunities, but according to a U.N. Trade and Development forecast, the AI market will expand in size to $4.8 trillion by 2033. Nvidia CEO Jensen Huang said that he sees a $1 trillion opportunity in AI chip sales for Nvidia in 2026 and 2027 alone, and Amazon CEO Andy Jassy has reiterated several times that he thinks there's going to be a major shift to AI, and that Amazon is getting into position to take advantage.

TSMC benefits as each of these companies invests. When the market hears that Amazon's planning $200 billion in capital expenditures this year, or that Alphabet's laying out $185 billion, investors should remember that a piece of that is certainly going to end up in TSMC's coffers.

Moving past Nvidia

To become more valuable than Nvidia over the next four years or so, TSMC would first have to catch up to where Nvidia is today, or Nvidia would have to fall. However, Nvidia is expecting its own high revenue growth over the next few years. It's growing faster than TSMC today, with a 73% year-over-year sales increase in its fiscal 2026 fourth quarter (which ended Jan. 25), compared to TSMC's sales jump of 41% in its last reported quarter.

TSMC stock might have more room to run if it were cheaper than Nvidia, but while it has a lower trailing-12-month P/E ratio, it's not significantly cheaper by that metric. It's also slightly more expensive on a forward, 1-year P/E ratio basis.

TSM PE Ratio data by YCharts.

TSMC stock might be somewhat less risky than Nvidia right now, which could be a reason to choose it over Nvidia if you're looking for a top AI stock. It's also likely to keep growing and rewarding shareholders. But the company isn't likely to be more valuable than Nvidia by 2030.

Jennifer Saibil has positions in Taiwan Semiconductor Manufacturing. The Motley Fool has positions in and recommends Amazon, Nvidia, Palantir Technologies, and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.