Discover the One Stock Poised to Surpass Nvidia Over the Next 3 Years

The semiconductor industry is undergoing rapid transformations, with competition impacting major players like Nvidia. The company has experienced incredible growth, with a staggering increase of 1,390% in its stock price over the past three years. An investment of $10,000 made in October 2022 would have surged to approximately $148,800 today. Despite this, Nvidia faces pressure from competitors aiming to capture a share of the GPU market.

Competition in the Semiconductor Market

Advanced Micro Devices (AMD) is intensifying the competition by securing partnerships, including a significant agreement with OpenAI to supply multiple generations of GPUs. Other tech giants such as Alphabet, Amazon, Microsoft, Meta Platforms, and Tesla are also developing their own custom chips. Moreover, companies from China are entering the scene to enhance their semiconductor capabilities.

While Nvidia currently dominates the GPU market with over 90% market share, this landscape is likely to evolve as new players emerge.

Promising Prospects for Taiwan Semiconductor Manufacturing (TSMC)

A notable company positioned to outperform Nvidia in the next three years is Taiwan Semiconductor Manufacturing Company (TSMC). Unlike competitors, TSMC operates as a leading fabricator of semiconductor chips. It produces products designed by Nvidia and its rivals, making it an essential player in this market.

Jensen Huang, CEO of Nvidia, describes TSMC’s fabrication abilities as “magic.” In 2024, TSMC manufactured over 11,800 distinct products using a variety of 288 processes. Notably, 60% of TSMC’s revenue is generated from producing advanced 3 nanometer (nm) and 5 nm chips, critical for semiconductor development.

• Market Share: TSMC commands approximately 70% of the semiconductor fabrication market.
• Chip Production: TSMC is one of the few fabricators capable of producing 3 nm chips on a large scale, with plans to mass-produce 2 nm chips soon.
• Client Diversification: TSMC manufactures chips for several major companies, including Nvidia, AMD, Amazon, Apple, Alphabet, and Qualcomm.

Investment in U.S. Fabrication

Trade discussions and potential tariffs have raised concerns for the semiconductor sector. Both the Trump and Biden administrations have sought to bolster domestic semiconductor manufacturing. In line with this goal, TSMC is investing $165 billion to expand its fabrication capabilities in Arizona, including constructing six plants in Phoenix.

This strategic shift will enable U.S. companies to manufacture chips domestically, helping to mitigate tariff-related challenges.

Revenue Growth and Future Estimates

TSMC’s financial performance demonstrates consistent growth, achieving a year-over-year revenue increase of 36%. The following table outlines TSMC’s monthly revenue for 2025:

With a consistent revenue stream exceeding $10 billion monthly, TSMC anticipates fourth-quarter revenues of $32.2 billion to $33.4 billion, with an operating margin around 50%. Analysts predict TSMC’s revenue could surpass $147 billion for the next fiscal year. This performance positions TSMC as a formidable player capable of outperforming Nvidia over the next few years.

For investors eyeing opportunities in the tech sector, TSMC represents a compelling option, as it not only manufactures for Nvidia but also for its competitors.