4 billionaires pile into Taiwan Semiconductor as AI chip demand surges

Four billionaire investors who rarely agree on a single trade have quietly accumulated $1 billion-plus positions in Taiwan Semiconductor Manufacturing, betting the chipmaker's monopoly on AI fabrication remains undervalued.

Four billionaire portfolio managers with opposing styles — growth, distressed, macro, activist — have converged on a single chip stock. Taiwan Semiconductor Manufacturing (NYSE:TSM) now sits in all four portfolios.

"Global chip supply would still fall short of demand for years to come," Chief Executive Officer C.C. Wei told investors on the company's most recent earnings call.

The numbers support the thesis. TSM's operating margin reached 58.1%, return on equity hit 36.2%, and quarterly earnings grew 58.4% year over year. May 2026 revenue set a record at NT$416.975 billion, surpassing the March mark. Wafer revenue climbed from NT$714 billion to NT$968 billion over the past year.

The valuation gap is what caught the billionaires' attention. TSM trades at 27 times forward earnings and a fraction of its customers' price-to-sales multiples. Nvidia, which relies on TSM to fabricate its Blackwell chips, fetches 19.55 times sales. AMD carries a P/E of 192. The company supplying all of them earns the fattest operating margins in the group and still gets the lowest multiple.

The Pick-and-Shovel Play in AI

Every major AI chip — Nvidia's H-series and Blackwell, Broadcom's custom XPUs, AMD's Instinct MI450 — gets fabricated at Taiwan Semi. Nvidia's trailing revenue ran $253.49 billion. Broadcom's AI semiconductor revenue jumped 143% year over year to $10.8 billion last quarter. AMD's data center segment grew 57% to $5.78 billion. TSM books the wafer revenue regardless of which design wins the inference race.

Performance has begun closing the valuation gap. TSM is up 53% year to date and 119% over the trailing year, outpacing Nvidia's 45% and Broadcom's 65% over the same stretch. Even after that run, the multiple discount persists.

The Risks That Explain the Discount

The risks are real and they explain why the stock trades at a discount. The top 10 customers represent 84% of accounts receivable. A strengthening New Taiwan dollar erodes reported margins. Taiwan sits 110 miles from China, and U.S. export reviews on advanced AI chips remain live policy. The U.S. investment tax credit on Arizona fabs was lifted from 25% to 35% effective Jan. 1, which offsets some geographic concentration but not all of it.

For investors, the question is whether the multiple re-rates toward Nvidia's territory. If TSM's price-to-sales multiple alone moved toward Nvidia's 19.55 times, the math would deliver significant upside. Nineteen analysts cover the stock: five rate it a strong buy, 12 a buy, and two a hold. The consensus target of $520.91 implies 10% upside from current levels. The four billionaires are betting the gap closes.

This article is for informational purposes only and does not constitute investment advice.