Taiwan Semiconductor Manufacturing Company (TSM) Surged Amid Increasing AI Momentum

Janus Henderson Investors, an investment management company, released its “Forty Fund” third-quarter 2025 investor letter. A copy of the letter can be downloaded here. US equities surged in the third quarter on positive corporate earnings news and hopes for Federal Reserve (Fed) rate cuts. The fund returned 8.38% in the third quarter, compared to the Russell 1000 Growth Index’s 10.51% return. Stock selection in the healthcare sector contributed to the relative performance of the fund in the quarter, while stock selection in the consumer discretionary sector detracted. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its third-quarter 2025 investor letter, Janus Henderson Forty Fund highlighted stocks such as Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM). Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) manufactures, packages, tests, and sells integrated circuits and other semiconductor devices. The one-month return for Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) was 7.03%, and its shares gained 51.67% over the last 52 weeks. On December 11, 2025, Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) stock closed at $304.85 per share, with a market capitalization of $1.581 trillion.

Janus Henderson Forty Fund stated the following regarding Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) in its third quarter 2025 investor letter:

"Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) was another positive contributor. As one of the world's dominant chip manufacturers, TSMC is the leading supplier of graphics processing units for companies, such as NVIDIA, that are at the forefront of the AI buildout. Excitement around the AI supply chain grew as leading hyperscalers and other technology companies continued to announce substantive investments in high-performance computing. We believe TSMC is well positioned to capitalize on this spending due to its unparalleled scale, deep technological advantages, and partnerships with major semiconductor companies and hyperscalers."

Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is in 9th position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 194 hedge fund portfolios held Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) at the end of the third quarter, compared to 187 in the previous quarter. In the third quarter of 2025, Taiwan Semiconductor Manufacturing Company Limited’s (NYSE:TSM) revenue increased 6% sequentially in NT. While we acknowledge the potential of Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) and shared the list of AI stocks analysts are watching closely. In addition, please check out our hedge fund investor letters Q3 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.