1 No-Brainer AI Stock Down 27% to Buy the Dip on Right Now (Hint: It's Not Nvidia)

Core Viewpoint - 2025 has been challenging for AI stocks, with pressures from trade wars, high valuations, and signs of slowing demand impacting performance [1] Company Overview - Taiwan Semiconductor Manufacturing Company (TSMC) is the largest contract semiconductor manufacturer, handling over 50% of global contract chip production and approximately 90% of advanced chip production [4] - TSMC is a key player in the technology supply chain, serving major companies like Apple, Nvidia, and Qualcomm, and is significant in the AI sector due to its advanced chip-making capabilities [5] Recent Performance - TSMC reported a 41.6% increase in revenue to $25.5 billion in the first quarter, with operating income at$12.4 billion and an operating margin of 48.5% [6] - Advanced chips (7nm or less) constituted 73% of TSMC's revenue, with high-performance computing accounting for 59% of total revenue, indicating strong demand for AI applications [8] Growth Strategy - TSMC is poised for growth due to increasing semiconductor demand, driven by the integration of semiconductors into more products and advancements in technology [9] - The company is expanding its manufacturing footprint globally, including significant investments in the U.S., with a commitment of $100 billion for chip manufacturing [10] Competitive Advantages - TSMC's competitive advantages are expected to strengthen as it diversifies its manufacturing base and increases capacity [11] - The company is currently trading at a low price-to-earnings ratio of 21, suggesting it is undervalued compared to the S&P 500 [12] Long-term Outlook - TSMC's growth potential, competitive advantages, and low valuation position it as a strong investment opportunity in the long term [14]