Cathie Wood's Ark Invest is Betting Big on TSMC

Cathie Wood’s hedge fund Ark Invest purchased millions of shares of Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) in a trade on May 20.

Ark Invest funds are snapping up TSMC stock, indicating a strategic shift towards this non-Nvidia chip stock. The Ark Innovation ETF bought 27,099 shares of TSM, while the Ark Next Generation Internet ETF acquired 17,172 TSM shares. The combined value of this trade is almost worth $8.4 million.

Wood’s funds are once again betting on the semiconductor maker after they began the sell-off of TSM shares in Q3 last year. This move comes as a reversal following some major developments in the past week. TSM’s growing role in supplying top U.S. firms with AI and consumer electronics chips has caught the attention of investors. TSM’s collaborations with chip designers such as Qualcomm reflect the growing demand and its integral part in the global AI chips supply chain. Following the easing of trade between the U.S. and China, investors see potential in TSM’s cross-border manufacturing capabilities.

Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is involved in providing integrated circuit manufacturing services to leading chip designers. TSMC’s integrated circuit manufacturing services include special process technology, process technology, mask technology, and silicon staking technology services, among others. Some of the top customers of TSMC’s chips include Apple, Nvidia, AMD, Broadcom, Marvell, MediaTek, and Qualcomm.

While we acknowledge the potential of TSM to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than TSM and that has 100x upside potential, check out our report about this cheapest AI stock.

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Disclosure. None.