TLDR
- Billionaire Stanley Druckenmiller dumped his entire Palantir position to buy Taiwan Semiconductor stock over four quarters
- Nvidia CEO Jensen Huang called TSMC a “world-class foundry” saying “you can’t overstate the magic that is TSMC”
- TSM shares jumped 2% following Huang’s comments during Nvidia’s $5 billion Intel partnership announcement
- Intel and Nvidia both confirmed continued reliance on TSMC manufacturing despite Intel’s foundry competition
- Analysts rate TSM as Strong Buy with average price target of $280.57, implying 4.4% upside potential
Stanley Druckenmiller made waves in tech investing circles by completely selling his Palantir Technologies stake while aggressively buying Taiwan Semiconductor Manufacturing (TSM) shares. The billionaire hedge fund manager’s Duquesne Family Office has been accumulating TSM stock for four straight quarters, signaling strong conviction in the chip foundry giant.
The strategic pivot comes as Palantir trades at extreme valuations with a price-to-sales ratio hitting 126. This multiple far exceeds software industry standards and surpasses dot-com bubble levels. Druckenmiller’s exit suggests even bullish AI stocks can become too expensive for value-conscious investors.
Taiwan Semiconductor operates the world’s most advanced chip manufacturing facilities. The company produces semiconductors for major tech firms including Nvidia, Apple, and AMD. This foundry model allows TSMC to capture value from multiple AI trends without designing its own chips.
Nvidia CEO Huang Praises TSMC Manufacturing Excellence
Taiwan Semiconductor received a major boost when Nvidia CEO Jensen Huang publicly praised the company during a high-profile industry event. Huang called TSMC a “world-class foundry” and declared “you can’t overstate the magic that is TSMC.” The endorsement came during Nvidia’s announcement of a $5 billion collaboration with Intel.
TSM stock immediately responded to Huang’s comments, gaining 2% in trading sessions. The market interpreted the Nvidia CEO’s praise as confirmation of TSMC’s critical role in AI chip production. Investors view such endorsements from industry leaders as strong indicators of future business partnerships.
The timing proved particularly telling given the context. Nvidia and Intel unveiled plans to combine Intel’s x86 processors with Nvidia’s GPUs using NVLink technology. Despite Intel’s growing foundry ambitions, both companies acknowledged their continued dependence on TSMC manufacturing capabilities.
Intel CEO Lip-Bu Tan admitted that while Intel develops next-generation 14A and 18A process nodes, immediate collaboration with Nvidia requires TSMC’s proven production expertise. This admission highlights Taiwan Semiconductor’s manufacturing leadership in advanced chip production.
Wall Street Maintains Bullish TSM Outlook
Professional analysts remain optimistic about Taiwan Semiconductor’s prospects in the expanding AI market. The company holds a Strong Buy consensus rating based on six Buy recommendations, one Hold, and zero Sell ratings from Wall Street research firms. This unanimous bullish sentiment reflects confidence in TSMC’s competitive position.
The average analyst price target sits at $280.57 per share, representing 4.4% upside from current levels. This target suggests modest but steady gains as AI infrastructure investment accelerates globally. TSMC’s diversified customer base provides stability during market volatility.
Investment research firm Cash Flow Club noted that Taiwan Semiconductor “remains very well positioned and the clear manufacturing leader for the time being.” This competitive advantage should help the company maintain market share as artificial intelligence applications expand across industries.
TSMC’s foundry model creates multiple revenue streams from AI growth. Rising demand for GPUs, CPUs, and specialized AI chips all translate to increased manufacturing orders for the Taiwan-based company.
