Why Taiwan Semiconductor Manufacturing Stock Could Be the Best AI Value on the Market

There are so many artificial intelligence (AI) stocks to choose from on the market today. The eight most highly valued stocks in the U.S. are all AI-related stocks, and then there are all of the small up-and-coming disruptors that could be tomorrow's Nvidia and Palantir Technologies.

Different stocks meet different needs, but if you're looking for an excellent value, I think Taiwan Semiconductor Manufacturing (NYSE: TSM) could be the best AI value on the market today.

Image source: Taiwan Semiconductor.

Incredible AI tailwinds

Clearly, TSMC's chipmaking business right now is driven by AI. It works with all the top AI designers, including Nvidia, Alphabet, and Amazon. In fact, it recently opened its first U.S. plant to service these customers better. Nvidia made a big announcement when its first Blackwell architecture chips were the first to roll off TSMC's belts last year, and Taiwan Semi recently announced a huge deal with the Trump administration to invest $250 billion in U.S. plant development.

The company has been working on a U.S. expansion for years, even before recent tariffs became an issue. But part of the new deal includes lower tariffs for Taiwan-made goods, an extra plus for the company on merchandise not produced in the new U.S. locations.

High-performance computing, the segment where the AI business operates, accounted for 58% of Taiwan Semi's total revenue in 2025, up 48% from 2024. Management said it would raise its capital expenditure spend this year, from $41 billion in 2025 to around $54 billion in 2026. "At TSMC," said CFO Wendell Huang on the January earnings call, "a higher level of capital expenditures is always correlated to the high growth opportunities in the following years." That's an exciting sentiment for shareholders.

A solid business

But what makes Taiwan Semiconductor stock a value as opposed to a risky growth stock is its long-established and diversified business. It's been around since 1987, and it has been at the forefront of semiconductor innovation since that time, well before AI was a buzzword.

It has spearheaded development of every kind of new technology since then, and it's still a major player in many different spaces, particularly smartphone and autonomous vehicles, which made up 29% and 5% of its business last year. That gives it staying power and value; if AI moves on to the next trend, Taiwan Semi will likely be spearheading that, too.

Considering all of its growth and opportunities, Taiwan Semiconductor stock is priced to buy. It trades at P/E ratio of 31, which is an attractive entry point for new investors, making it the best AI value on the market.

Jennifer Saibil has positions in Taiwan Semiconductor Manufacturing. The Motley Fool has positions in and recommends Alphabet, Amazon, Nvidia, Palantir Technologies, and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.