Overlooked Cheap Stocks to Buy Today: Why Taiwan Semi Deserves a Spot in Your AI Portfolio

While most investors obsess over Nvidia, AMD, and Broadcom when hunting for AI semiconductor plays, a compelling opportunity sits right underneath their noses. Taiwan Semiconductor Manufacturing (TSMC) has quietly become one of the cheapest stocks to buy today in the AI infrastructure space—especially when you factor in its growth trajectory and strategic positioning.

The world’s largest semiconductor manufacturer by revenue doesn’t design chips; it manufactures them. Yet this behind-the-scenes role is proving to be far more valuable than most realize. As hyperscalers like Alphabet, Microsoft, Meta Platforms, and Amazon pour billions into AI infrastructure, TSMC stands as the essential production backbone enabling their ambitions.

The $2 Trillion Opportunity Behind TSMC’s Foundry Dominance

Current market valuation pegs TSMC at approximately $1.7 trillion, positioning it among the world’s most valuable corporations. To join the exclusive $2 trillion club—a milestone many expect by mid-2026—the stock would need roughly an 18% appreciation from current levels. Given the stock’s 62% gain over the past 12 months, this seems well within reach.

What makes this particularly compelling for investors seeking cheap stocks to buy today is the asymmetry between current valuation and future earning potential. The company’s forward price-to-earnings multiple of 24 trades roughly 22% below its historical peak. This apparent discount becomes even more significant when considering the structural demand drivers supporting TSMC’s expansion.

The narrative around TSMC has shifted from cyclical semiconductor recovery to structural AI infrastructure buildout. Unlike previous chip cycles, this wave is characterized by sustained capital commitment from the industry’s largest players—not just inventory replenishment.

AI Infrastructure Spending Surge: How Hyperscalers Are Fueling TSMC’s Growth

Wall Street consensus, compiled by FactSet Research, projects that major technology companies will spend $527 billion on AI infrastructure throughout 2026—a 13% increase from earlier forecasts. This represents not a temporary spike but the foundation of a multi-year expansion cycle.

McKinsey & Company’s research suggests an even grander vision: $5 trillion in cumulative AI workload support by 2030. Translation: the appetite for semiconductor manufacturing capacity—both training and inference chips—will expand exponentially across the industry’s largest developers.

While Nvidia, AMD, and Broadcom capture headlines as the chip designers and processors, TSMC operates the factories where these innovations become physical reality. The global semiconductor shortage never fully resolved; instead, it transformed into a capacity constraint. Every major chip designer outsources manufacturing to foundries, with TSMC commanding roughly 50% of the advanced node market.

Beyond demand, TSMC is aggressively positioning itself as the geographically diversified manufacturing hub. The company is expanding footprint into Japan, Germany, and significantly, Arizona. A potential $300 billion expansion to its existing $165 billion Arizona infrastructure project demonstrates serious commitment to Western supply chain security—a factor particularly appealing to U.S. investors and government policymakers alike.

This geographic diversification does more than hedge geopolitical risk. It strengthens pricing power. As production capacity remains the bottleneck in AI expansion, TSMC’s ability to deliver chips on schedule translates directly to negotiating leverage with customers and healthier profit margins.

Valuation Reality Check: Why This Taiwan Semiconductor Stock Looks Reasonably Priced

The forward P/E of 24 might seem elevated until you examine the denominator. Sell-side analysts model TSMC generating $13.26 in earnings per share for 2026. At that P/E multiple’s historical peak of 30, shares could reach approximately $390—implying a $2.3 trillion market capitalization.

Achieving these earnings estimates represents no extraordinary feat. It simply requires TSMC to capture incremental manufacturing volume from its customers’ capex surges and maintain current operational efficiency. The company has demonstrated this capability repeatedly throughout the AI buildout cycle.

For investors searching for cheap stocks to buy today with genuine growth catalysts, TSMC presents a compelling case. The company operates with significant moats: advanced manufacturing expertise, customer relationships, and geographic diversification. Unlike Nvidia and AMD, which face potential design competition, TSMC’s foundry business benefits from higher customer lock-in and switching costs.

The current valuation offers meaningful upside potential if TSMC maintains its market position and achieves consensus earnings expectations. A 30% appreciation to $390 per share seems achievable by year-end 2026 if fundamentals track current guidance—a realistic scenario given the underlying AI infrastructure tailwinds.

For portfolio construction, TSMC represents the “pick and shovel” approach to AI investment: profiting from the infrastructure buildout regardless of which specific AI applications ultimately dominate. This structural positioning, combined with reasonable valuation relative to growth prospects, makes Taiwan Semiconductor Manufacturing one of the more compelling opportunities in the semiconductor space right now.