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Taiwan Semiconductor Manufacturing Company Ltd. (NYSE:TSM) is one of the top AI stocks to buy, according to billionaire Philippe Laffont. On June 29, Barclays reiterated that Taiwan Semiconductor Manufacturing Company Ltd. (NYSE:TSM) is well positioned for robust growth amid strong demand for advanced logic wafer supply.

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According to Barclay's analyst Simon Coles, the market is clamoring for advanced logic wafer supply, which is translating into booming business for the company. Amid the strong market demand, the investment bank has reiterated an Overweight rating on the stock and hiked the price target to $625 from $470. The new price target represents significant upside potential as the stock is trading at about $455 a share.

Barclays insists that Taiwan Semiconductor Manufacturing is one of the top investment plays for gaining exposure to artificial intelligence. The research firm expects the company's competitive edge to continue growing as capital expenditures are poised to increase from $56 billion in 2026 to $74 billion in 2027.

S&P Global Ratings has already affirmed its AA- long-term issuer credit rating on the stock, impressed by the market leadership in the global semiconductor foundry sector.

Taiwan Semiconductor Manufacturing Company Ltd. (NYSE:TSM) is the vital manufacturing backbone of the global AI industry. While it does not design chips itself, it produces over 90% of the world's most advanced leading-edge semiconductors, fabricating the processors that power AI data centers, autonomous systems, and generative AI models.

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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