Two prominent chipmakers have recently exited the trillion-dollar club as their market capitalizations have decreased. Currently, only seven public companies hold market caps of at least $1 trillion, six of which are technology companies with Berkshire Hathaway being the exception.
The surge in artificial intelligence (AI) trends has significantly boosted tech stocks, helping companies like Nvidia and Meta Platforms to join the trillion-dollar club alongside Apple, Microsoft, Amazon, and Alphabet. However, some previously qualifying companies have seen their market caps drop below this threshold. Notable among them are two AI chipmakers, which analysts expect could regain their trillion-dollar status by 2025.
### 1. Taiwan Semiconductor Manufacturing (TSMC)
Taiwan Semiconductor Manufacturing (TSMC), a third-party foundry leader, specializes in advanced chipmaking, powering devices from companies including Nvidia and Advanced Micro Devices. Recently, TSMC has experienced increased revenue and profit due to strong demand for high-end graphics processing units (GPUs) used in data centers. Despite potential normalization concerns, current trends suggest continued robust growth.
TSMC’s growth is bolstered by Apple’s announcement to invest $500 billion into U.S. manufacturing and silicon engineering, utilizing TSMC’s facilities for advanced silicon production. Moreover, TSMC plans to expand its U.S. presence with an additional $100 billion investment in chipmaking infrastructure, complementing an existing $65 billion expansion. These developments position TSMC for success with domestic partners such as Nvidia, AMD, and Qualcomm.
Wall Street remains optimistic about TSMC’s future, driven by custom silicon solutions from major tech companies like Microsoft, Alphabet, Amazon, and OpenAI. TSMC’s current market cap stands at approximately $916 billion, around 9% short of the trillion-dollar milestone. Factors such as tariffs, macroeconomic outlook, and broader tech sector corrections have influenced recent stock performance, though with a forward price-to-earnings (P/E) multiple of 19.5, TSMC appears to trade favorably compared to past trends.
### 2. Broadcom
Broadcom, with its wide range of AI-driven products, primarily focuses on network equipment and security solutions for data centers. The company benefits greatly from the rising demand for custom silicon solutions. Despite recent stock fluctuations, largely attributed to economic macro concerns rather than company-specific issues, Broadcom shows potential for recovery.
Over the past two years, AI hardware discussions have centered around GPUs from Nvidia and AMD. However, tech giants such as Microsoft, Amazon, Alphabet, and Meta are projected to spend heavily on AI infrastructure, offering growth prospects for Broadcom given its expertise in network infrastructure and security for data centers. CEO Hock Tan highlights recent partnerships with hyperscalers to develop custom accelerators for advanced models.
With strong AI demand and its crucial role in data centers, Broadcom’s current market volatility does not overshadow its potential. As AI infrastructure spending increases and Broadcom strengthens its collaborations with major tech companies, investor confidence is expected to rise, potentially restoring Broadcom to the trillion-dollar club in the near future.
