The Smartest Artificial Intelligence (AI) Stock to Buy With $1,000 Right Now

Is the artificial intelligence (AI) bubble going to burst this year? It's anyone's guess, and there's been a lot of guessing.

If you want to invest in AI's potential but play it safe, there are a few ways to do it. One of them is to buy a stock that can greatly benefit from AI tailwinds but still has a long growth runway if the AI bubble pops.

Taiwan Semiconductor Manufacturing (NYSE: TSM) makes products that are crucial to AI development but has many other products, too, making it the smartest choice if you have $1,000 and want to invest in AI.

Image source: Taiwan Semiconductor.

AI and more

Taiwan Semiconductor operates a semiconductor foundry business, which means it manufactures semiconductors for a varied client base. It's the largest of its kind and has produced 85% of global semiconductor prototypes.

Clients like Nvidia and Microsoft rely on Taiwan Semi for their production, which gives it broad exposure to the trend. That gives investors broad exposure, as well, instead of making a bet on which AI company is going to win out in the end.

The company also makes semiconductors for many other uses, including smartphones and autonomous vehicles. It's been around far longer than the current AI trend, and no matter what happens this year, it will benefit from changing trends in technology.

Even better, Taiwan Semiconductor trades at a reasonable price-to-earnings ratio (P/E) of 33. That's a great entry point for investors for a stock that's performing well today and has lots of long-term opportunity.

Jennifer Saibil has positions in Taiwan Semiconductor Manufacturing. The Motley Fool has positions in and recommends Microsoft, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.