The Smartest AI Stock to Buy With $1,000 Right Now
Key Points
Taiwan Semiconductor Manufacturing makes chips for many of the world's biggest tech companies.
It has benefited from the growth of AI, but its semiconductors will still be in high demand even if AI spending slows down.
- 10 stocks we like better than Taiwan Semiconductor Manufacturing ›
Wall Street has grown skeptical of artificial intelligence (AI) spending by major tech companies. But even with a recent dip in stock prices, there are still excellent companies with long-term growth potential in this space.
If you have $1,000 you'd like to invest in an AI stock, my top pick right now would be Taiwan Semiconductor Manufacturing Co. (NYSE: TSM), or TSMC for short.
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Image source: Taiwan Semiconductor Manufacturing.
TSMC fills a crucial role for AI and tech as a whole
TMSC is the world's leading semiconductor foundry, and it's not a close race. It had a 70% market share as of Q2 2025, compared to 7% for second place Samsung. Other tech companies design chips for smartphones, electric vehicles (EVs), AI accelerators, and so on, but TSMC is the one that actually manufactures them. Clients include Nvidia, Apple, and Broadcom, to name a few.
Because of how reliant tech companies are on TSMC, it provides a combination of security and growth potential to its investors. The chipmaker has benefited from AI computing needs and spending so far. Revenue rose 30% year over year to $33 billion in Q3 2025, and 60% of TSMC's revenue now comes from sales of its most advanced 3nm and 5nm chips, up from just 8% in Q3 2020.
TSMC is essentially an AI stock that isn't overly dependent on AI. Tech companies will continue to need semiconductors, and TSMC will most likely continue to supply the bulk of them.
Should you invest $1,000 in Taiwan Semiconductor Manufacturing right now?
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Lyle Daly has positions in Broadcom and Nvidia. The Motley Fool has positions in and recommends Apple, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool recommends Broadcom. The Motley Fool has a disclosure policy.
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