Artificial intelligence (AI) is the hottest trend in the market this year.
ChatGPT is everywhere. For the first time ever, everyday people can now interact with AI right from their computers. That’s why many AI stocks are skyrocketing.
Take Nvidia, for example.
I first recommended this chipmaker as a play on AI to my readers back in December 2015 when it was trading just above a split-adjusted price of $8.
Since then, it’s up over 5,200%. And it continues to power higher.
In May 2023, Nvidia shocked Wall Street with its earnings report.
While first-quarter results were better than predicted, it was the forward guidance that blew analysts away.
Analysts had expected a forecast of $7.1 billion in revenue for the second quarter.
Meanwhile, Nvidia forecasted $11 billion, 55% above expectations. That lofty guidance was driven by outstanding growth in its AI business.
CEO Jensen Huang called it an “iPhone moment” for Nvidia.
So it’s no surprise Nvidia is up 226% since the beginning of the year – making it one of the best-performing stocks of 2023.
Nvidia has established itself as a go-to provider for high-performance AI hardware.
And it’s only the eighth company to reach a $1 trillion market cap – joining the likes of Apple, Amazon, Alphabet, Microsoft, Meta, Tesla, and Saudi Aramco.
But here’s the problem with Nvidia…
It’s already trading north of $400 per share. It was cheap when I recommended it back in 2015 – but it’s not cheap anymore.
Today, I’ll reveal another chipmaker with a market cap about half the size of Nvidia. Based on our research, it has over 6x upside potential as it rides the AI megatrend.
My No. 1 AI Stock for 2023
The company I’m talking about is Taiwan Semiconductor Manufacturing (TSM).
TSM is the world’s largest semiconductor manufacturing company. But its market cap is $450 billion compared to Nvidia’s $1.06 trillion.
TSM makes integrated circuits and other semiconductor devices that are used in a wide range of products including AI, smartphones, the Internet of Things, automotive, digital consumer electronics, and more.
What makes TSM unique is that it’s the first company to exclusively focus on semiconductor manufacturing without involvement in design or commercialization.
So it takes the designs from companies such as Nvidia and AMD and brings them to life.
This enables TSM to specialize solely in manufacturing and adapt its structure to accommodate designs from various designer companies.
This is meaningful to TSM’s customers, as they know TSM won’t compete with their products. Nor is there a risk of stealing their intellectual property.
That’s helped TSM become the world’s largest and most advanced semiconductor foundry today. (A foundry is a semiconductor fabrication plant that makes chips for other companies. It’s also known as a “fab.”)
For perspective, TSM manufactured 12,689 different products, using 288 different technologies, and serviced 532 different customers in 2022.
Being the most advanced semiconductor foundry is key for TSM to leverage the AI boom. AI applications such as deep learning rely on high-performance computing capabilities to analyze vast amounts of data and make intelligent decisions.
TSM has those capabilities. In fact, Nvidia made TSM the sole supplier of its latest GPU, called H100.
Over the last decade, TSM has consistently improved the power, performance, cost, and time to market of its chips, leaving competitors in the dust.
But there’s one major advantage TSM has that I believe will push it even higher…
It’s expertise lies in its ability to manufacture chips based on customers’ specifications.
But it’s not as simple as selling a general chip. TSM collaborates closely with customers to manufacture chips based on customer designs. This enables customized and specialized chips designed for AI.
That’s why Nvidia recently placed additional orders for AI chips that require TSM’s chip on wafer on substrate (CoWoS) packaging.
CoWoS allows companies to integrate high-bandwidth memory. The increased bandwidth is particularly beneficial for memory-intensive AI applications.
The technology also allows the integration of chiplets. These tiny integrated circuits increase power and efficiency.
Nvidia and AMD, the leaders in AI chips, already utilize 70% to 80% of TSM’s CoWoS capacity.
TSM plans to double CoWoS capacity by the end of 2024.
With the most advanced manufacturing facilities, cutting-edge chips, and collaborations with AI hardware developers, TSM is perfectly positioned to benefit from the AI boom.
According to Precedence Research, AI is already a nearly $100 billion industry. And it’s expected to grow to nearly $2 trillion over the next decade.
So we’re looking at close to 40% annual growth for the next decade.
TSM expects AI processor demand to grow at a close to 50% compounded annual growth rate over the next five years.
The company’s P/E ratio is currently 15, roughly 30% lower than its five-year average of 21.5. Estimates are for $6.27 in earnings in fiscal 2024.
[The P/E ratio, or price-to-earnings ratio, measures how much people are willing to pay for $1 of earnings.]
At a P/E of 21.5, that would put TSM around $135. Right now, it trades around $94.
Under a blue sky-scenario, if TSM can grow profits 20% annually over the next five years and get a premium valuation… It could rise to $642.
That’s a 583% gain from here – or over 6x upside potential.
An Even Bigger Opportunity Than TSM
While TSM could potentially return more than 6x over the coming years… Let me tell you something 99.9% of people don’t know.
For the past few months, engineers from Google and Microsoft have been working on a little-known crypto project that I believe will revolutionize the AI industry.
And I’ve found a way for you to get in on the ground floor of this project for less than $1.
According to my research, this project has at least 100x more upside potential than popular AI stocks like TSM and Nvidia.
That’s because it’s solving a major problem that’s preventing AI from fulfilling its full potential.
Hear me when I tell you: This could be one of the biggest opportunities of my career.
That’s why on Wednesday night, I held a special strategy session called The #1 Coin for the AI Boom.
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I also revealed an event guaranteed to happen on August 23 at 4 p.m. ET that could send this coin into a parabolic move higher.
This is the hottest new trend in the crypto world, and it’s still just a tiny, little niche of the crypto market.
Since this is a brand-new trend, many of these cryptos still trade for pocket change. So it doesn’t take much to send them skyrocketing.
For example, earlier this year, a coin called Artificial Liquid Intelligence jumped as high as 839%… Another one called SingularityNet rallied 1,108%… And SelfKey soared even higher… an incredible 5,077%.
Friends, everything I’ve seen across four separate decades indicates this is just the beginning of a historic boom.
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Let the Game Come to You!
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