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Top 10 Stock Picks of 10 Famous Billionaires. Taiwan Semiconductor (NYSE:TSM) ranks #3 (see Top 5 Stock Picks of 5 Famous Billionaires).

Number of Hedge Funds: 234

Top Pick Of: Philippe Laffont — Coatue Management

Taiwan Semiconductor (NYSE:TSM) is the biggest holding of billionaire Philippe Laffont of Coatue Management.

Taiwan Semiconductor (NYSE:TSM) is a direct beneficiary of the AI boom. It controls about 62% of the total foundry market and more than 90% of advanced nodes at 7nm and below. Advanced nodes matter because the smallest, most powerful chips used in AI workloads can only be manufactured at these process sizes. Customers cannot switch because no other foundry can match TSMC’s scale or technical capability at these levels. The client list tells the story. Apple, Nvidia, AMD, Qualcomm, Broadcom, MediaTek, and Marvell all rely on TSMC for production.

The financials back up the dominance. In Q1, revenue rose 40.6% year over year to $35.9 billion. For the full year 2026, TSMC expects revenue growth of more than 30%. Gross margin reached 66.2% in Q1 and operating margin came in at 58.1%. These are the numbers of a company with real pricing power. To meet rising demand, TSMC is raising capital spending to between $52 billion and $56 billion in 2026, up about 32% year over year. Global AI accelerator spending is projected to grow from $116 billion in 2024 to $604 billion by 2033. TSMC is the dominant manufacturer sitting at the center of that buildout.

Eagle Point Capital stated the following regarding Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) in its Q1 2026 investor letter:

Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)  is beloved by investors because it dominates the cutting edge of their industries. But the technology in its field is changing rapidly. It is unclear if it will be able to change with it. They must continuously disrupt and reinvent themselves before their competitors do. The odds are that eventually they’ll stumble. No one bats one thousand forever. History is littered with companies, like Intel, that looked dominant but could not adapt as their environment changed (Click Here to Read the Letter in Detail).

Close-up of Silicon Die are being Extracted from Semiconductor Wafer and Attached to Substrate by Pick and Place Machine. Computer Chip Manufacturing at Fab. Semiconductor Packaging Process.

While we acknowledge the potential of TSM 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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