Why Taiwan Semiconductor Manufacturing Stock Was Climbing Today

Shares of Taiwan Semiconductor Manufacturing (NYSE: TSM) were one of several artificial intelligence (AI) stocks moving higher today, a broad response to President Trump's announcement of the new Stargate AI infrastructure project yesterday afternoon.

As of 12:27 p.m. ET, TSMC stock was up 2.9%.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. See the 10 stocks »

Image source: Getty Images.

Billions are set to pour into AI chips

Yesterday, President Trump announced a new AI infrastructure project called Stargate, bringing together the leaders of Oracle, OpenAI, and Softbank, the Japanese tech mega-investor run by Masayoshi Son, in a joint venture to invest at least $100 billion in new infrastructure to power AI. The joint venture could invest as much as $500 billion.

A wide range of AI stocks were climbing on the news, including Arm Holdings, Nvidia, and Broadcom, as the deal looks set to kick off a windfall in the AI sector.

TSMC is also likely to be a beneficiary from the move, as it's the global leader in third-party semiconductor manufacturing and dominates the market for advanced chips, the kind being used to run AI data centers.

More money spent to build data centers will almost certainly lead to more revenue for TSMC, as its top customers include major players in AI and tech like Nvidia, Broadcom, Arm, and AMD, so it's understandable that Taiwan Semi is riding the rising tide higher.

Is Stargate a game changer?

There's a lot of excitement around the news, and it's not surprising to see stocks that are direct winners from the deal, like Arm, surging on the news.

However, there's a difference between announcing a project of this size and completing it, and it could take years to invest the $100 billion or more. Notably, 10 data centers, built by the venture, are already under construction in Texas.

TSMC's success doesn't depend on Stargate, but it would be a boon for the company. Either way, the AI boom still has a lot of legs, and that should carry TSMC higher.

Don’t miss this second chance at a potentially lucrative opportunity

Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.

On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:

• Nvidia: if you invested $1,000 when we doubled down in 2009, you’d have $365,174!*
• Apple: if you invested $1,000 when we doubled down in 2008, you’d have $42,164!*
• Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $469,011!*

Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon.

Learn more »

*Stock Advisor returns as of January 21, 2025

Jeremy Bowman has positions in Advanced Micro Devices, Arm Holdings, Broadcom, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool has positions in and recommends Advanced Micro Devices, Nvidia, Oracle, and Taiwan Semiconductor Manufacturing. The Motley Fool recommends Broadcom. The Motley Fool has a disclosure policy.