In This Article:
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Despite short-term market volatility, AI continues to offer long-term growth potential.
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Three companies benefiting from strong AI demand are TSMC, Nvidia, and Dell.
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These three offer investors exposure to different segments of the AI ecosystem.
The burgeoning artificial intelligence (AI) market boasts no shortage of high-flying stocks. Yet today's volatile macroeconomic climate, fueled by the Trump administration's ever-evolving tariff policies, necessitates choosing AI businesses that can thrive through this unpredictability.
Three AI companies with the ability to do so are Dell Technologies (NYSE: DELL), Nvidia (NASDAQ: NVDA), and Taiwan Semiconductor Manufacturing (NYSE: TSM), commonly called TSMC. Amid an uncertain economy, these companies have demonstrated AI success, indicating the potential for prosperity over the long run when economic conditions improve.
Not only that, but investing in all three gives you exposure to key segments of the AI ecosystem. Nvidia designs AI semiconductor chips, TSMC manufactures them, and Dell uses them in the hardware sold to customers. Here's a deeper look into each.
TSMC is one of the industry leaders in AI chip manufacturing thanks to its cutting-edge 3 nanometer (nm) process. The miniature size involved in 3nm, which is about the diameter of human DNA, allows more components on each chip. This delivers superior microprocessor speed and computational power.
The chipmaker's tiny tech has powered outsize sales growth. In the first quarter, its revenue rose 35% year over year to $25.5 billion, or 839.3 billion in New Taiwan dollars, as 3nm sales contributed 22% of income, up from just 9% a year ago.
Despite today's macroeconomic uncertainty, the company expects Q2 revenue to reach between $28.4 billion and $29.2 billion. That would be a substantial jump up from the prior year's $20.8 billion, continuing the strong year-over-year growth seen in the first quarter.
Along with growing revenue, TSMC possesses strong financials. Its Q1 balance sheet boasted total assets of NT$7.1 trillion with cash and marketable securities of NT$2.7 trillion, and that cash pile alone eclipsed total liabilities of NT$2.5 trillion. TSMC's combination of advanced tech and financial strength make it a great AI investment.
AI leader Nvidia is not immune to the current macroeconomic situation, but results for its fiscal first quarter, ended April 27, affirm that the semiconductor giant is still firing on all cylinders. Revenue rose 69% year over year to $44.1 billion.