NVIDIA can attribute its stock uptrend to the ongoing demand for its chipsets over the past few years.
The rise in spending on servers, network devices and data centers suggests that infrastructure may be the next big topic in the AI story.
Despite rising infrastructure spending, foundry experts Taiwan’s semiconductor manufacturing industry may be better positioned for NVIDIA.
10 better stocks than Taiwan Semiconductor Manufacturing ›
When Chatgpt released to the wider public on November 30, 2022 Nvidia The market value is only US$345 billion. As of July 25, 2025, the closing bell has exceeded $4.2 trillion, making it the most valuable company in the world – also big.
Given these historic gains, it is no surprise for many growth investors to spin around NVIDIA. At this point, the company is basically seen as a barometer for measuring the overall health of the entire AI sector.
It’s hard to bet on Nvidia, but I do see another stock in the semiconductor space that seems to be positioned for long-term growth.
Let’s explore what Taiwan Semiconductor Manufacturing(NYSE: TSM) Currently, such a compelling opportunity in the chip space, it is possible that the catalysts of the fuel may return to Nvidia’s advantage over the next few years.
I like to think of AI narrative as a story. Over the past few years, the largest chapters have been spinning around advanced chipsets called graphics processing units (GPUs), used in a variety of generated AI applications. These include building large language models (LLM), machine learning, robotics, autonomous vehicles, etc.
These various applications are now starting to focus. The next big chapter in the AI storyline is how infrastructure plays a role in actually developing and scaling these more advanced technologies.
Global management consulting firm McKiney & Company estimates that investment in AI infrastructure could reach $6.7 trillion over the next five years, much of which is allocated to data center hardware.
Solve this idea from this idea, consider cloud high standards Amazon,,,,, Microsoftand letterand their “outstanding seven” companions Meta PlatformIt is expected to invest $330 billion in capital expenditure (capital expenditure) this year. Most of this is used in other servers, chips and network devices to accelerate the expansion of AI data centers.
For me, the positive spending on CAPEX from the world’s largest businesses shows that a wave of infrastructure in AI is beginning to take shape.
Image source: Getty Images.
Rising investment in artificial intelligence infrastructure is a huge obstacle to NVIDIA, but it is also a source of growth Advanced Micro Devices,,,,, Broadcomand many others.
However, unlike AMD or NVIDIA, the growth of Taiwan’s semiconductors (TSMC for short) does not really depend on the success of a particular product line. In other words, NVIDIA and AMD are competing against each other to win the workload of AI, which boils down to the fact that they can design the most powerful and effective chips at affordable prices.
TSMC’s investment case around TSMC is that it can be seen as an agnostic in the AI chip market as its foundries and manufacturing services will benefit from a wider, more secular tailwind, fueling the AI infrastructure – whoever creates the highest demand.
Think of TSMC as the company actually made the draft picks and shovels that NVIDIA, AMD and other chip companies need to go out and sell when competing with each other.
The valuation differences between NVIDIA and TSMC suggest several things about how the latter is viewed in the broader chip landscape.
YCHARTS’s TSM PE ratio (forward) data; pe = profitable price.
Companies such as NVIDIA and AMD rely heavily on TSMC’s foundry and manufacturing services, which are actually the backbone of the chip industry. Although some people on Wall Street think that Nvidia has certain bargaining chips and software, I think TSMC’s moat is insufficient, and compared with its peers, TSMC’s moat is insufficient.
Over the next five years, I think the use cases of AI development increase as enterprises seek to expand in cloud computing, cybersecurity, enterprise software and more.
Emerging applications such as autonomous driving and quantum computing will further drive the demand for GPU and data center capacity. Therefore, TSMC may be on the brink of “NVIDIA moment” with its long-term explosive growth.
Compared to NVIDIA, TSMC’s 25 forward forward price multiples (P/E) are in a unique position (its forward price-to-earnings ratio of 40) because the infrastructure chapter of AI continues to be written, so it can be expanded extensively.
I think the valuation of Taiwan’s semiconductor manufacturing industry will be increasingly valued than the company’s growth in the next few years, so I predict that by 2030, the stock will outperform Nvidia.
Before you buy stocks at a Taiwanese semiconductor manufacturer, consider the following:
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Adam Spatacco has positions in Alphabet, Amazon, Metaplatform, Microsoft and Nvidia. Motley Fool has a location and recommends advanced micro devices, letters, Amazon, metaplatforms, Microsoft, NVIDIA and Taiwan semiconductor manufacturing. Motley Fool recommends Broadcom and recommends the following options: 1 January 2026 Microsoft $395 Phone and 1 January 2026 Short Call $405 Phone on Microsoft. Motley Fool has a disclosure policy.
Prediction: This Artificial Intelligence (AI) stock was originally published by Motley Fool to 2030
