The surge of interest in artificial intelligence (AI) has been driving the stock market for over a year, starting with OpenAI’s ChatGPT chatbot release in November 2022. Leading AI technology companies like Nvidia and Super Micro Computer have seen massive stock gains, with Nvidia’s stock rising over 410% in 16 months. Despite the valuation risks associated with investing in these skyrocketing AI stocks, there are other avenues to benefit from the AI boom.
Taiwan Semiconductor Manufacturing (TSMC) is at the forefront of the increasing demand for AI-driven computing power. With more complex AI software requiring faster and more energy-efficient chips, TSMC is well-positioned to capitalize on this demand surge in the coming years. TSMC’s strategic role in enabling the next wave of AI advancements, along with its key partnerships with major chip designers like Nvidia, makes it a prudent choice for investors looking to capitalize on the AI frenzy.
Alphabet, Google’s parent company, is also poised to benefit from the AI boom due to its longstanding commitment to integrating AI across its advertising products. With AI playing a crucial role in driving value for advertisers, Alphabet’s stock, trading at a modest 23 times earnings, may be underappreciated in the market. The company’s innovations in making advanced AI tools accessible to a broader range of advertisers position it as a leader in the digital economy, making it an undervalued AI titan with significant growth potential.
