Dig into the inventory market lately, and one may simply be overwhelmed by the funding choices. The New York Inventory Alternate contains 2,200 corporations, and there are one other 3,450 shares listed on the Nasdaq alternate. Let’s add to that quantity the shares on the over-the-counter markets, the place you might have practically 6,500 extra names from which to decide on. After which there are exchange-traded funds (ETFs), which embody baskets of shares. There are greater than 14,000 ETFs out there globally.
So, with all these decisions in entrance of you, how is it potential to decide on the neatest single funding to make in 2026?
One technique is to slim down the investing themes. Synthetic intelligence (AI) has been an enormous driver in current quarters, with most of the prime tech corporations seizing the chance to construct merchandise and produce huge wealth to their shareholders. Shares within the grouping often called the Magnificent Seven, which comprise the most important tech shares within the S&P 500, are main names within the AI race and have grown to valuations exceeding $1 trillion every. In reality, these seven corporations now make up 34% of the S&P 500’s valuation, reaching a return of practically 700% from 2015 to 2024.
Picture supply: Getty Photographs.
It could be a sensible play to spend money on a number of of those Magnificent Seven shares. However contemplating that these corporations are sometimes competing with one another for supremacy, the neatest play lies outdoors this grouping with an organization that stands to learn from the AI build-out no matter which Magnificent Seven inventory emerges in a dominant place.
This is why I believe Taiwan Semiconductor Manufacturing(NYSE: TSM), higher often called TSMC, is the neatest funding you may make in the present day.
AI is a gigantic discipline that is getting larger, seemingly by the day. Grand View Analysis estimates that the AI market was value $390.91 billion in 2025 and will likely be value practically $3.5 trillion by 2033, which represents a compound annual progress price of 30.6%. Nvidia CEO Jensen Huang has been much more bullish, estimating that AI infrastructure alone may very well be value $4 trillion by 2030.
On the intersection of all this progress is TSMC, which is the world’s largest foundry for semiconductor chips. The corporate produced greater than 11,800 separate merchandise in 2024, utilizing practically 300 completely different course of applied sciences. And most significantly, among the largest AI corporations on the earth use TSMC’s foundries, together with Apple, Qualcomm, Superior Micro Units, Broadcom, Nvidia, Intel, and Amazon.
As Nvidia’s Huang says, “They’re a world-class foundry and help prospects of various wants. You’ll be able to’t overstate the magic that’s TSMC.”
TSMC is in excessive demand as a result of its experience in manufacturing 3nm and 5nm chips. Chips which might be 3nm have smaller transistors than 5nm chips, and supply higher efficiency and energy effectivity. As just lately as 2023, TSMC was getting greater than half of its income from chips bigger than 7nm, however its speedy development in fabrication expertise is altering the sport. Within the third quarter of 2025, TSMC bought 23% of its income from 3nm chips and 37% of its income from 5nm chips, in keeping with Motley Idiot analysis.
TSMC would not obtain the identical publicity as Nvidia or the members of the Magnificent Seven, however the firm’s monetary statements present how sturdy it’s. Income in Q3 was $33.10 billion, up 40.8% from a 12 months in the past. The corporate had a internet revenue of $15.1 billion, with a internet revenue margin of 45.7% and earnings per share of $0.58, up 39% from a 12 months in the past.
It additionally issued steering for This fall for income between $32.2 billion and $33.4 billion, which on the midpoint can be a 22% enhance from a 12 months in the past.
The inventory was up 53% in 2025, and analysts at Yahoo! Finance have bullish scores, as 15 of 17 analysts surveyed have “purchase” scores and two others advocate holding the inventory. No analyst is recommending promoting TSMC inventory.
TSMC is the closest factor you may get to a diversified funding in semiconductors with a single inventory. Nvidia is the go-to firm for knowledge heart chips proper now, however no matter whether or not Nvidia continues to carry that crown or one other firm begins stealing market share, TSMC seems to be within the catbird’s seat. It might be the neatest funding you may make in the present day.
Before you purchase inventory in Taiwan Semiconductor Manufacturing, take into account this:
The Motley Idiot Inventory Advisor analyst workforce simply recognized what they imagine are the 10 finest shares for buyers to purchase now… and Taiwan Semiconductor Manufacturing wasn’t one among them. The ten shares that made the reduce may produce monster returns within the coming years.
Contemplate when Netflix made this listing on December 17, 2004… should you invested $1,000 on the time of our suggestion, you’d have $488,653!* Or when Nvidia made this listing on April 15, 2005… should you invested $1,000 on the time of our suggestion, you’d have $1,148,034!*
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Patrick Sanders has positions in Nvidia. The Motley Idiot has positions in and recommends Superior Micro Units, Amazon, Apple, Intel, Nvidia, Qualcomm, and Taiwan Semiconductor Manufacturing. The Motley Idiot recommends Broadcom and Nasdaq. The Motley Idiot has a disclosure coverage.
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