ClearBridge Large Cap Growth Strategy Trimmed Taiwan Semiconductor Manufacturing Company Limited (TSM) to Manage the Risk

ClearBridge Investments, an investment management company, released its “ClearBridge Large Cap Growth Strategy” second quarter 2025 investor letter. A copy of the letter can be downloaded here. In the second quarter, the growth stocks rebounded from tariff uncertainty, with technology and communication services sectors leading in the return to a risk-on environment. The S&P 500 Index returned 10.9% in the quarter, while the technology-heavy NASDAQ Composite soared 17.7%. The benchmark, the Russell 1000 Growth Index, rose 17.8% in the quarter, outperforming the Russell 1000 Value Index. Against this backdrop, the strategy underperformed its benchmark in the second quarter. IT and communication services sectors contributed to the performance while the health care sector detracted. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its second quarter 2025 investor letter, ClearBridge Large Cap Growth Strategy 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 of Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) was 15.47%, and its shares gained 28.66% of their value over the last 52 weeks.  On July 3, 2025, Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) stock closed at $234.80 per share, with a market capitalization of $1.218 trillion.

ClearBridge Large Cap Growth Strategy stated the following regarding Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) in its second quarter 2025 investor letter:

"In the semiconductor sector, we trimmed our position in Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) to manage the risk amid intensified geopolitical tensions between the U.S. and China in 2025, directing the proceeds into the purchase of a position in Broadcom."

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, 187 hedge fund portfolios held Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) at the end of the first quarter, which was 186 in the previous quarter. While we acknowledge the potential of Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the undervalued AI stock set for massive gains.

In another article, we covered Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) and shared the list of buzzing AI stocks on Wall Street. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors. While we acknowledge the potential of MUSA 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.

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