Missed Nvidia in 2009? This Rare Signal Is Flashing Again.\u00a0In 2009, a “Double Down” signal flashed for a little-known chipmaker called Nvidia.\u00a0For the first time in years, that same “Total Conviction” signal is flashing for a company 1\/100th the size of Nvidia.\u00a0Continue \u00bb<\/a> <\/p>\n More importantly, TSMC is well-positioned to continue benefiting from the AI infrastructure boom. Let’s look at the reasons why it seems like a bad idea to overlook this solid semiconductor stock. <\/p>\n TSMC released its second-quarter 2026 earnings report on July 16. The company’s revenue increased 34% year over year to $40.2 billion, while earnings per share jumped by an even more impressive 77% from the year-ago period to $4.31. The numbers exceeded analysts’ expectations, and its guidance was the icing on the cake. <\/p>\n TSMC anticipates Q3 revenue of $45.2 billion, which points to a 37% jump from the year-ago period. Even better, the company sees its operating margin increase to 57% in the current quarter, up from 50.6% in the year-ago quarter. This points toward another major jump in TSMC’s bottom line. Wall Street anticipates a 54% year-over-year increase in TSMC’s earnings in the current quarter. However, the company’s guidance suggests it could do better than that, primarily due to a significant increase in its margins. <\/p>\n Also, TSMC has increased its full-year guidance. It now expects 2026 revenue to increase by more than 40%, up from the earlier estimate of 30%-plus growth. TSMC attributes the stronger guidance to the growing demand for AI chips. Management noted on the latest earnings call<\/a> that AI is driving “the need for more and more computation,” with applications such as agentic AI driving a resurgence in central processing units (CPUs). <\/p>\n Looking ahead, AI infrastructure spending could jump from an estimated $1 trillion in 2027 to $3-$4 trillion in 2030, according to industry bellwether Nvidia. This indicates that TSMC’s incredible growth will continue in the long run, given that it is the go-to manufacturer for chips for the leading AI chip designers, including Nvidia, AMD, Qualcomm, Broadcom, and others. <\/p>\n Not surprisingly, there has been a significant uptick in TSMC’s earnings forecast following its quarterly report. <\/p>\n The stock can go on a terrific bull run <\/p>\n TSMC stock may have underperformed the broader market this year, but don’t be surprised if it steps on the gas. We have already seen that the company is growing at an impressive pace, and it can sustain its momentum over the long run due to the secular growth of the AI infrastructure space. <\/p>\n What’s more, investors can buy TSMC at 25 times forward earnings right now, which is in line with the Nasdaq-100 index’s forward earnings multiple. If TSMC’s earnings per share indeed reach $28.03 in 2028 and it trades at 25 times earnings at that time, its stock price could jump to $700. That’s a potential gain of 67% in less than three years, which is why investors should consider buying this AI stock before it regains its mojo. <\/p>\n Should you buy stock in Taiwan Semiconductor Manufacturing right now? <\/p>\n Before you buy stock in\u00a0Taiwan Semiconductor Manufacturing, consider this: <\/p>\n The Motley Fool\u00a0Stock Advisor\u00a0analyst team just identified what they believe are the\u00a010 best stocks<\/a>\u00a0for investors to buy now\u2026 and\u00a0Taiwan Semiconductor Manufacturing\u00a0wasn’t one of them.\u00a0The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. <\/p>\n Consider when\u00a0Netflix\u00a0made this list on December 17, 2004… if you invested $1,000 at the time of our recommendation,\u00a0you’d have $369,577!*\u00a0Or\u00a0when\u00a0Nvidia\u00a0made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation,\u00a0you’d have $1,301,557!* <\/p>\n That performance is why people listen. With a track record of\u00a0beating the S&P 500 by 4x,\u00a0Stock Advisor\u00a0offers a distinct advantage. Don’t miss the latest top 10 list, available with\u00a0Stock Advisor, and join an investing community built for the long haul. <\/p>\n See the 10 stocks \u00bb<\/a> <\/p>\n *Stock Advisor returns as of July 23, 2026. <\/p>\n Harsh Chauhan<\/a> has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Broadcom, Nvidia, Qualcomm, and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy<\/a>. <\/p>\n<\/a> Image source: TSMC. TSMC’s growth rate is picking up thanks to AI infrastructure spending <\/p>\n