The four major AI hyperscalers – Amazon, Microsoft, Alphabet, and Meta Platforms – are expected to spend around $650 billion on data center capital expenditures in 2026. As a result, companies like Taiwan Semiconductor are poised to reap significant benefits from the growing demand for artificial intelligence (AI) chips.
Taiwan Semiconductor Manufacturing Company (TSMC) is well-positioned to capitalize on this trend due to its dominant position in chip foundry services. With a strong client list that includes major players such as Nvidia, AMD, and Broadcom, TSMC is likely to receive orders for custom-designed chips from hyperscalers looking to build their AI infrastructure.
TSMC’s management expects AI chip revenue to grow at a 60% compound annual growth rate (CAGR) between 2024 and 2029, driven by the ongoing AI buildout. While TSMC’s stock may not be undervalued compared to the S&P 500, it remains an attractive option for investors looking to play the AI trend.
With hyperscalers investing heavily in AI infrastructure, TSMC is poised to benefit from this growth. Its stock price of 26 times forward earnings is relatively reasonable considering the company’s strong position and expected revenue growth. As such, now may be an excellent time to consider buying TSMC shares.
Source: https://www.fool.com/investing/2026/02/21/1-company-set-to-make-a-fortune-from-data-centers