Taiwan Semiconductor Manufacturing (TSM): A Beneficiary of AI Boom

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Soumya Eswaran

Fri, July 17, 2026 astatine 9:19 AM CDT 4 min read

Wedgewood Partners, an concern absorption company, released its first-quarter 2026 capitalist letter. A transcript of the missive tin beryllium downloaded here. Wedgewood Composite delivered a nett instrumentality of 9.4% successful the 2nd 4th compared to 15.2% for the Standard & Poor's 500 Index, 16.7% for the Russell 1000 Growth Index, and 13.9% for the Russell 1000 Value Index. The steadfast is optimistic astir the semipermanent maturation of hyperscalers and has accrued its investments successful this sector, citing their important net imaginable and important relation successful AI adoption. Capital has besides been redirected towards exertion hardware stocks, particularly semiconductors, which present marque up a larger stock of the S&P 500 Index. Semiconductor stocks person benefited from hyperscalers' spending, but the steadfast expresses caution astir cyclical hazard and volatility. However, the momentum-driven marketplace negatively affected the Wedgewood fund's high-quality stocks, starring to a 25% instrumentality implicit the past 15 months, importantly underperforming the 90% summation of the S&P 500 Momentum ETF (SPMO). In addition, delight cheque the Fund's apical 5 holdings to cognize its champion picks successful 2026.

In its Q2 2026 capitalist letter, Wedgewood Partners highlighted Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) arsenic a apical contributor to performance. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is the world's starring declaration spot manufacturer, producing precocious semiconductors for large planetary exertion companies. On July 16, 2026, Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) closed astatine $409.74 per share. One-month instrumentality of Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) was -13.23%, and its shares gained 66.80% implicit the past 52 weeks. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) has a marketplace capitalization of $1.98 trillion.

Wedgewood Partners stated the pursuing regarding Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) successful its Q2 2026 capitalist update:

"Top show contributors for the 2nd 4th see Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), Alphabet, United Rentals, Apple, and Visa.

Another beneficiary of the AI spending roar has been Taiwan Semiconductor Manufacturing. Revenues grew by much than 40% (in USD), connected apical of 40% maturation past year. Its leading-edge fabs and packaging capableness are afloat booked, driving margins to all-time highs. Much of this capableness was enactment successful spot a fewer years ago, earlier generative AI was a household and business-wide term. More caller request signals from customers - including Nvidia, Broadcom, and adjacent Micron - bespeak AI-related maturation of implicit 50% per annum done 2029. Whereas the Company utilized to person request visibility lone a fewer quarters out, it present has visibility a fewer years out. As with long-held portfolio hazard mitigation, we bounds each positions to 10% weightings. We judge it is prudent to support this risk-management bounds connected the stock, particularly fixed the monolithic capitalist inflows into semiconductor-levered stocks and the ample speculative ecosystem (e.g., 2x- and 3x-leveraged single-stock ETFs) that has precocious sprung up astir them."

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