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Okay, let's talk Nvidia. Up 1,390% in three years? That's not just a rocket ship; it's a w... Okay, let's talk Nvidia. Up 1,390% in three years? That's not just a rocket ship; it's a whole damn space program. A $10,000 investment back in October 2022 would be sitting pretty at nearly $150,000 right now. But can that trajectory really continue?
The Nvidia Question Mark
The problem, as always, is competition. Advanced Micro Devices (AMD) is nipping at Nvidia's heels, even scoring a deal with OpenAI. And let's not forget the giants like Alphabet, Amazon, Microsoft, Meta, and Tesla all cooking up their own silicon in-house. Even Chinese firms are getting in on the act. Nvidia might have a stranglehold on the GPU market now (north of 90%, they say), but that kind of dominance rarely lasts.
So, where else can you park your cash for similar, or even better, returns? The answer, surprisingly, might be the company making those Nvidia chips: Taiwan Semiconductor Manufacturing (TSMC).
TSMC is the unsung hero of the semiconductor world. Nvidia designs the chips, TSMC builds them. Jensen Huang himself calls TSMC's fabrication process "magic." In 2024 alone, they churned out over 11,800 different products using 288 different processes. The real money is in the cutting-edge stuff: 3-nanometer (nm) and 5 nm chips, which account for 60% of their revenue.
Smaller circuits, more power. That's the name of the game. And TSMC is one of the few players that can mass-produce these things. They're even gearing up for 2 nm chips this year.
Statista (take it with a grain of salt) claims TSMC controls about 70% of the semiconductor fabrication market. Here's the kicker: that's unlikely to change significantly. TSMC doesn't just make Nvidia chips; they make chips for AMD, Amazon, Apple, Alphabet, Qualcomm—basically, everyone. So, even if AMD steals market share from Nvidia, TSMC still wins. It's like selling shovels during a gold rush.
There's been a lot of noise about trade wars, tariffs, and the whole "re-shoring" of semiconductor manufacturing. Trump wanted it, Biden passed the CHIPS Act to incentivize it. But TSMC is already hedging its bets. They're plowing $165 billion into expanding capacity in Arizona, where they're already making Nvidia Blackwell chips. Six fabrication plants in the Phoenix area. That's not a small investment (understatement of the year). Fabricating chips on American soil sidesteps potential tariff headaches and political grandstanding.
By The Numbers
TSMC's revenue growth is nothing to sneeze at, holding steady at 36% year-over-year.
Let's break that down, because the monthly numbers tell a more nuanced story:
* January 2025: $9.59 billion (39.5% YoY growth)
* February 2025: $8.50 billion (43.1% YoY growth)
* March 2025: $9.35 billion (46.5% YoY growth)
* April 2025: $11.43 billion (48.1% YoY growth)
* May 2025: $10.48 billion (39.6% YoY growth)
* June 2025: $8.63 billion (26.9% YoY growth)
* July 2025: $10.57 billion (25.8% YoY growth)
* August 2025: $10.98 billion (33.8% YoY growth)
* September 2025: $10.10 billion (31.4% YoY growth)
* Total: $90.42 billion (36.4% YoY growth)
Consistently hitting $10 billion a month, with guidance for Q4 to bring in $32.2 billion to $33.4 billion, and an operating margin around 50%. Not bad. Not bad at all. Wall Street seems to agree, steadily revising revenue estimates upward. Next year's revenue is projected to be north of $147 billion.
I've looked at hundreds of these filings, and this level of sustained, broad-based growth is unusual. The market cap is $1.558 trillion.
The Obvious Choice?
So, if you're looking for a company that can potentially outperform Nvidia over the next three years, TSMC is a strong contender. They're the picks-and-shovels play in the AI gold rush. They win, no matter who "wins" the GPU war. As some analysts suggest, Is This the Only Stock That Will Outperform Nvidia for the Next 3 Years?