TSMC and Broadcom may rejoin trillion-dollar club

Two semiconductor companies are predicted to rejoin the trillion-dollar club by the end of the year. These companies recently fell below this valuation but are considered strong investments due to the growing demand for artificial intelligence (AI). The first company, Taiwan Semiconductor Manufacturing Company (TSMC), specializes in advanced chipmaking. It has seen substantial revenue growth driven by the high demand for graphics processing units (GPUs) used in data centers. TSMC's recent partnerships, especially with Apple, are promising. Apple plans to invest $500 billion in U.S. manufacturing, significantly benefiting TSMC. Analysts are optimistic about TSMC's outlook, with expectations for continued growth in AI infrastructure investment. TSMC's current market cap is about $916 billion, around 9% short of a trillion-dollar valuation. Despite recent stock sell-offs due to economic uncertainty, analysts believe TSMC's fundamentals remain strong. With a current forward price-to-earnings ratio that is attractive compared to its historical trends, analysts suggest that now is a good time to invest. The second company, Broadcom, offers AI-powered products mainly in network equipment and security for data centers. While its stock has fluctuated, these dips are usually short-lived. Broadcom benefits from the increasing demand for custom silicon solutions as major tech firms invest heavily in AI infrastructure. The company recently announced new partnerships to develop custom accelerators for AI models. Broadcom's market position appears strong, suggesting that it could rebound quickly. With the growing need for AI infrastructure, investor confidence in Broadcom is expected to rise. Analysts believe it will soon reclaim its spot in the trillion-dollar club thanks to its role in supporting big tech companies.