Giverny Capital Highlights TSMC as AI Chip Demand Drives 68% Revenue Growth
Giverny Capital Asset Management highlighted Taiwan Semiconductor Manufacturing Company as a core holding that has nearly doubled in value, reinforcing the chipmaker's strategic dominance in the artificial intelligence supply chain.
Giverny Capital Asset Management told investors in its second-quarter 2026 letter that Taiwan Semiconductor Manufacturing Company has nearly doubled since the firm initiated its position last summer. The world's largest contract chipmaker closed at $402.30 on July 20, securing a $1.86 trillion market capitalization.
The investment firm noted that TSMC serves as the primary supplier of advanced semiconductors for major technology clients, including Nvidia, Broadcom, and Apple. "Its growth is also accelerating, with June revenue up 68% from a year earlier," Giverny wrote to shareholders. Despite a recent one-month pullback of 4.25%, the stock has appreciated 78.11% over the past 52 weeks.
Institutional appetite for the foundry leader remains robust as investors seek reliable exposure to the artificial intelligence buildout. Heading into 2026, TSMC ranked as the sixth most popular stock among hedge funds, with 234 portfolios holding shares at the end of the first quarter. This represents an increase from 224 funds in the previous quarter.
The company's recent financial performance justifies this institutional confidence. TSMC reported $35.9 billion in revenue for the first quarter of 2026, a 6.4% sequential increase in U.S. dollar terms that exceeded management's own guidance. This consistent execution provides a contrast to broader market concerns regarding speculative valuations.
Giverny's endorsement of TSMC is particularly notable given the asset manager's cautious macroeconomic outlook. While the S&P 500 returned 15.20% in the second quarter and 10.21% year-to-date, Giverny's model portfolio lagged at 13.70% and 5.89%, respectively.
In its letter, the firm warned that current market dynamics increasingly reward momentum over underlying business fundamentals, fueling anxiety over a potential AI bubble. Even as major technology conglomerates report robust profit margins, Giverny cautioned that heavy corporate reliance on speculative "moonshot" projects introduces long-term sustainability risks. Consequently, the firm advises investors to anchor portfolios with established market leaders like TSMC, whose tangible earnings growth provides a buffer against volatility.
