Key Backdoor Stocks Fueling the AI Revolution
Taiwan Semiconductor
Taiwan Semiconductor (or TSMC) is the world's largest contract chip manufacturer, supplying chips to leading tech companies like Apple and AMD. Its state-of-the-art chip technology, including 3-nanometer and upcoming 2-nanometer chips, positions it as a vital player in the AI value chain.
TSM Performance:
- Recent growth: Revenue rose 8% and 11% year over year in January and February 2024, with further growth expected by Wall Street analysts.
- Investment strength: With a reasonable PE ratio and strong financial outlook, TSM presents a solid investment opportunity in AI.
ASML
ASML provides the specialized equipment, including extreme ultraviolet lithography machines, essential for advanced chip production. With virtually a technological monopoly, ASML is poised for significant growth as chipmakers ramp up high-end chip manufacturing.
ASML Investment Outlook:
- High potential: Despite its premium stock price, ASML is expected to experience substantial revenue growth in the coming years.
- Long-term focus: Owning ASML requires a patient approach due to potential revenue fluctuations and long-term growth prospects.
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